Minnesota
|
|
3841
|
|
41-1458152
|
(State
of Incorporation)
|
|
(Primary
Standard Industrial Classification Code Number)
|
|
(IRS
Employer ID No.)
|
Title
Of Each Class Of Securities To Be Registered
|
Amount
To Be Registered
(1)
|
Proposed
Maximum Offering Price Per Unit
|
Proposed
Maximum Aggregate Offering Price
|
Amount
Of Registration Fee
|
|||||||||
|
|
|
|
|
|||||||||
Common
stock, $0.001 par value, issuable upon conversion of preferred
stock
|
43,219
|
$
|
5.38
(2
|
)
|
$
|
232,518
|
$
|
24.88
(3
|
)
|
||||
Common
stock, $0.001 par value, issuable upon exercise of stock
options
|
218,454
|
$
|
5.38
(2
|
)
|
$
|
1,175,283
|
$
|
125.76
(3
|
)
|
||||
Common
stock, $0.001 par value
|
4,004,264
|
$
|
5.45
(4
|
)
|
$
|
21,823,238
|
$
|
2334.87
(3
|
)
|
||||
Common
stock, $0.001 par value, issuable upon exercise of
warrants
|
371,163
|
$
|
5.38
(2
|
)
|
$
|
1,996,857
|
$
|
213.66
(3
|
)
|
||||
|
|||||||||||||
Total
|
4,637,100
|
$
|
25,227,896
|
$
|
2699.17
(3
|
)
|
(1)
|
Includes
shares of our common stock, par value $0.001 per share, which
may be
offered pursuant to this registration statement, a portion of
which shares
are issuable upon conversion of preferred stock and convertible
debentures
and exercise of warrants and stock options held by the selling
shareholders. In addition to the shares set forth in the table,
the amount
to be registered includes an indeterminate number of shares,
including
those issuable upon conversion of the preferred stock and convertible
debentures and exercise of the warrants and stock options, as
such number
may be adjusted as a result of stock splits, stock dividends
and similar
transactions in accordance with Rule 416.
|
(2)
|
Estimated
solely for the purpose of calculating the amount of the registration
fee
pursuant to Rule 457(c) under the Securities Act of 1933, as
amended,
based upon the average of the bid and asked prices of the Registrant's
common stock on November 7, 2005.
|
(3)
|
Previously
paid.
|
(4)
|
Represents
a combination of (2) and (5).
|
(5)
|
Estimated
solely for the purpose of calculating the amount of the registration
fee
pursuant to Rule 457(c) under the Securities Act of 1933, as
amended,
based upon the average of the bid and asked prices of the Registrant's
common stock on March 20, 2006.
|
Common
Stock Offered
|
|
4,637,100
shares by selling shareholders
|
Offering
Price
|
Market
price or negotiated price
|
|
Common
Stock Outstanding Before the Offering
|
14,717,686
shares as of April 25, 2006
|
|
Use
of Proceeds
|
|
We
will not receive any proceeds from the resale of the shares offered
hereby, all of which proceeds will be paid to the selling
shareholders.
|
Risk
Factors
|
|
The
purchase of our common stock involves a high degree of risk. You
should
carefully review and consider the "RISK FACTORS" section beginning
on page
4.
|
OTC
Bulletin Board Symbol
|
|
ISRY.OB
|
·
|
our
achievement of product development objectives and milestones;
|
·
|
demand
and pricing for the Company's products;
|
·
|
effects
of aggressive competitors;
|
·
|
hospital,
clinic and physician buying decisions;
|
·
|
research
and development and manufacturing expenses;
|
·
|
patient
outcomes from our therapy;
|
·
|
physician
acceptance of our products;
|
·
|
government
or private healthcare reimbursement policies;
|
·
|
our
manufacturing performance and capacity;
|
·
|
incidents,
if any, that could cause temporary shutdown of our manufacturing
facilities;
|
·
|
the
amount and timing of sales orders;
|
·
|
rate
and success of future product approvals;
|
·
|
timing
of FDA approval, if any, of competitive products and the rate of
market
penetration of competing products;
|
·
|
seasonality
of purchasing behavior in our market;
|
·
|
overall
economic conditions; and
|
·
|
the
successful introduction or market penetration of alternative therapies.
|
Period
|
High
|
Low
|
|||||
October
1, 2003 - December 31, 2004
|
N/A
|
N/A
|
|||||
January
2, 2005 - March 31, 2005
|
*
|
*
|
|||||
April
1, 2005 - June 30, 2005
(1)
|
N/A
|
N/A
|
|||||
July
1, 2005 - September 30, 2005
|
$
|
5.95
|
$
|
1.00
|
|||
October
1, 2005 - December 31, 2005
|
$
|
8.25
|
$
|
4.50
|
*
|
Less
than $0.01.
|
(1)
|
Due
to our change of fiscal year end from September 30 to June 30, our
2005
fiscal year was only nine months
long.
|
Plan
Category
|
Number
of securities to be issued upon exercise of outstanding options,
warrants
and rights (#)
|
Weighted-average
exercise price of outstanding options, warrants and rights
($)
|
Number
of securities remaining available for future issuance under equity
compensation plans
|
|||||||
Equity
compensation plans approved by shareholders
|
N/A
|
N/A
|
N/A
|
|||||||
Equity
compensation plans not approved by shareholders
|
2,841,716
|
$
|
1.65
|
870,000
|
||||||
Total
|
2,841,716
|
$
|
1.65
|
870,000
|
·
|
Began
offering seeds loaded in sterile strands and needles from IsoRay’s custom
preloading service (March 2006);
|
·
|
Began
radioactive operations in our new manufacturing facility in Richland,
Washington (November 2005);
|
·
|
Deployed
a direct sales force to the market (July 2004 - July
2005);
|
·
|
Developed
a treatment protocol for prostate cancer with a leading oncologist
(January 2005);
|
·
|
Treated
the first patient (October 2004);
|
·
|
Commenced
production of the
131
Cs
seed (August 2004);
|
·
|
Filed
five additional patent applications for
131
Cs
and
90
Y
processes (November 2003 -August 2004);
|
·
|
Obtained
a Nuclear Regulatory Commission Sealed Source and Device Registration
required by the Washington State Department of Health and the FDA
(September 2004);
|
·
|
Received
a Radioactive Materials License from the Washington State Department
of
Health (July 2004);
|
·
|
Implemented
an ISO-9000 Quality Management System and production operating procedures
(under continuing development);
|
·
|
Signed
a Commercial Work for Others Agreement between Battelle (manager
of the
Pacific Northwest National Laboratory or PNNL) and IsoRay Medical,
allowing initial production of seeds through 2006 at PNNL (April
2004);
|
·
|
Raised
over $17.5 M in debt and equity funding (September 2003 - February
2006)
|
·
|
Obtained
favorable Medicare reimbursement codes for the Cs-131 brachytherapy
seed
(November 2003);
|
·
|
Obtained
FDA 510(k) approval to market the first product: the
131
Cs
brachytherapy seed (March 2003);
|
·
|
Completed
initial radioactive seed production, design verification, computer
modeling of the radiation profile, and actual dosimetric data compiled
by
the National Institute of Standards and Technology and PNNL (October
2002); and
|
·
|
Obtained
initial patent for
131
Cs
isotope separation and purification (May 2000).
|
Stages
|
Characteristics
of prostate cancer
|
|
T1
or T2
|
Localized
in the prostate
|
|
T3
or T4
|
Locally
advanced
|
|
N+
or M+
|
Spread
to pelvic lymph nodes (N+)or distant organs
(M+)
|
·
|
A
twelve-year clinical study published in the 2004 Supplement of the
International
Journal of Radiation Oncology, Biology and Physics
,
reported that the relative survival rate is 84% for low risk cancer
patients, 78% for intermediate risk cancer patients and 68% for high
risk
cancer patients. The study was conducted by Dr. Lou Potters, et al.
of the
New York Prostate Institute and included 1,504 patients treated with
brachytherapy between 1992 and 2000.
|
·
|
A
study published in the January 2004 issue of the
International
Journal of Radiation Oncology, Biology and Physics
,
reported that brachytherapy, radical prostatectomy, high-dose external
beam radiation therapy and combined therapies produced similar cure
rates.
The study was conducted by Dr. Patrick Kupelian, Dr. Louis Potters,
et al.
and included 2,991 patients with Stage T1 or T2 prostate cancer.
Of these
patients, 35% of patients underwent surgery, 16% received low-dose
EBRT,
10% received high-dose EBRT, 7% received combination therapy and
32%
received brachytherapy. After five years, the biochemical relapse-free
survival rate was 83% for brachytherapy, 81% for radical prostatectomy,
81% for high-dose EBRT, 77% for combination therapy and 51% for low-dose
EBRT.
|
·
|
A
nine-year clinical study published in the March 2000 issue of the
International
Journal of Radiation Oncology, Biology and Physics
,
reported that 83.5% of patients treated with the Pd-103 device were
cancer-free at nine years. The study was conducted by Dr. John Blasko
of
the Seattle Prostate Institute and included 230 patients with clinical
stage T1 and T2 prostate cancer. Only 3% experienced cancer recurrence
in
the prostate.
|
·
|
Results
from a 10-year study conducted by Dr. Datolli and Dr. Wallner published
in
the
International
Journal of Radiation Oncology, Biology and Physics
in
September 2002, were presented at the October 2002 American Society
for
Therapeutic Radiology and Oncology conference confirming the effectiveness
of the Pd-103 seed in patients with aggressive cancer who previously
were
considered poor candidates for brachytherapy. The 10-year study was
comprised of 175 patients with Stage T2-T3 prostate cancer treated
from
1991 through 1995. Of these patients, 79 percent remained completely
free
of cancer without the use of hormonal therapy or chemotherapy.
|
·
|
A
study by the Northwest Prostate Institute in Seattle, Washington
reported
79% disease-free survival at 12 years for brachytherapy in combination
with external beam radiation (Ragde,
et
al
.,
Cancer,
July 2000). The chance of cure from brachytherapy is nearly 50% higher
than for other therapies for men with large cancers (PSA 10-20) and
over
twice as high as other therapies for men with the largest cancers
(PSA
20+) (K. Wallner,
Prostate
Cancer: A Non-Surgical Perspective,
Smart Medicine Press, 2000).
|
·
|
Continue
to introduce the IsoRay
131
Cs
seed into the U.S. brachytherapy market
.
Utilizing a direct sales organization and selected channel partners,
IsoRay Medical intends to capture a leadership position by expanding
overall use of the brachytherapy procedure for prostate cancer, capturing
much of the incremental market growth and taking market share from
existing competitors.
|
·
|
Create
a state-of-the-art manufacturing process
.
IsoRay Medical has constructed a state-of-the-art manufacturing facility
in Richland, Washington in its newly leased facility, to implement
our
proprietary manufacturing process which is designed to improve profit
margins and provide adequate manufacturing capacity to support future
growth and ensure quality control. If Initiative 297 presents a strategic
roadblock to the Company, IsoRay plans to construct a permanent
manufacturing facility in another state. Working with leading scientists,
IsoRay Medical intends to design and create a proprietary separation
process to manufacture enriched barium, a key source material for
131
Cs,
to ensure adequate supply and greater manufacturing efficiencies.
Also
planned is a custom preloading service to supply pre-loaded needles,
stranded seeds and pre-loaded cartridges used in the implant procedure.
IsoRay Medical plans to enter into a long-term program with a leading
brachytherapy seed automation design and engineering company to design
and
build a highly automated manufacturing process to help ensure consistent
quality and improve profitability.
|
·
|
Introduce
Cesium-131 therapies for other solid cancer tumors
.
IsoRay Medical intends to partner with other companies to develop
the
appropriate delivery technology and therapeutic delivery systems
for
treatment of other solid cancer tumors such as breast, lung, liver,
pancreas, neck, and brain cancer. IsoRay Medical's management believes
that the first major opportunities may be for the use of Cesium-131
in
adjunct therapy for the treatment of residual lung and breast cancers.
|
·
|
Introduce
other isotope products to the U.S. market
.
IsoRay Medical plans to introduce its Yttrium-90 radioisotope in
2006.
Currently, FDA approved
90
Y
manufactured by other suppliers is used in the treatment of non-Hodgkin's
lymphoma and is in clinical trials for other applications. Other
products
may be added in the future as they are developed. IsoRay Medical
has the
ability to make several different isotopes for multiple medical and
industrial applications. During 2005 the Company has identified and
prioritized additional market opportunities for these
isotopes.
|
·
|
Support
clinical research and sustained product development
.
The Company plans to structure and support clinical studies on the
therapeutic benefits of Cs-131 for the treatment of solid tumors
and other
patient benefits. We are and will continue to support clinical studies
with several leading radiation oncologists to clinically document
patient
outcomes, provide support for our product claims and compare the
performance of our seeds to competing seeds. IsoRay Medical plans
to
sustain long-term growth by implementing research and development
programs
with leading medical institutions in the U.S. to identify and develop
other applications for IsoRay Medical's core radioisotope technology.
|
Cesium-131
|
Palladium-103
|
Iodine-125
|
|
Half
Life
|
9.7
Days
|
17.5
days
|
60
days
|
Energy
|
29
KeV
+
|
22
KeV
+
|
28
KeV
+
|
Dose
Delivery
|
90%
in 33 days
|
90%
in 58 days
|
90%
in 204 days
|
Total
Dose
|
100
Gy
|
125
Gy
|
145
Gy
|
Anisotropy
Factor
*
|
.969
|
.877
(TheraSeed® 2000)
|
.930
(OncoSeed® 6711)
|
+
KeV
= kiloelectron volt, a standard unit of measurement for electrical
energy.
*
Degree
of symmetry of therapeutic dose, a factor of 1.00 indicates symmetry.
|
·
|
Isotope
Generation
.
The
radioactive isotope Cs-131 is normally produced by placing a quantity
of
stable non-radioactive barium (ideally pure Ba-130) into the neutron
flux
of a nuclear reactor. The irradiation process converts a small
fraction of
this material into a radioactive form of barium (Ba-131). The Ba-131
decays by electron capture to the radioactive isotope of interest
(Cs-131). IsoRay Medical has evaluated several international nuclear
reactors and a few potential facilities in the United States. Due
to the
short half-life of both the Ba-131 and Cs-131 isotopes, these facilities
must be capable of removing irradiated materials from the reactor
core on
a routine basis. Reactor personnel will ship the irradiated barium
on a
pre-determined schedule to our facilities for subsequent separation,
purification and seed assembly. The Company has identified more
than five
reactors in the U.S., Europe and the former Soviet Union that are
capable
of meeting these requirements. This routine isotope generation
cycle at
supplier reactors will allow significant quantities of Ba-131 to
be on
hand at our facilities for the completion of the rest of the manufacturing
process. To ensure reliability of supply, we intend to seek agreements
with multiple facilities to produce Ba-131. As of the date of this
Prospectus, IsoRay Medical has agreements in place with two suppliers
of
irradiated Ba-131. The Company’s agreement with Russia’s Institute of
Nuclear Materials for irradiated Ba-131 has a seven year term (ending
August 25, 2012) and allows the Company to purchase irradiated
Ba-131 for
$300.00 per Curie of the isotope. In addition, the Company is engaged
in
the development of a barium enrichment device that, if successful,
should
reduce the cost of producing Cs-131 while maintaining the purity
and
consistency required in the end product.
|
·
|
Isotope
Separation and Purification
.
Upon
irradiation of the barium feedstock, the Ba-131 begins decaying
to Cs-131.
At pre-determined intervals the Cs-131 produced is separated from
the
barium feedstock and purified using a proprietary radiochemical
separations process (patent applied for). Due to the high-energy
decay of
Ba-131, this process is performed under stringent radiological
controls in
a highly shielded isolator or "hot cell" using remote manipulators.
After
separating Cs-131 from the energetic Ba-131, subsequent seed processing
may be performed in locally shielded fume hoods or glove boxes.
If
enriched barium feedstock is used, the residual barium remaining
after
subsequent Cs-131 separation cycles ("milkings") will be recycled
back to
the reactor facility for re-irradiation. This material will be
recycled as
many times as economically feasible, which should make the process
more
cost effective. As an alternative to performing the Cs-131 separation
in
our own facilities, IsoRay may enter into agreements with other
entities
to supply "raw" Cs-131 by performing the initial barium/cesium
separation
at their facilities, followed by final purification at IsoRay's
facility.
|
·
|
Internal
Seed Core Technology
.
The
purified Cs-131 isotope will be incorporated into an internal assembly
that contains a binder, spacer and X-ray marker. This internal
core
assembly is subsequently inserted into a titanium case. The dimensional
tolerance for each material is extremely important. Several carrier
materials and placement methods have been evaluated, and through
a process
of elimination, we have developed favored materials and methods
during our
laboratory testing. The equipment necessary to produce the internal
core
includes accurate cutting and gauging devices, isotope incorporation
vessels, reaction condition stabilization and monitoring systems,
and
tools for placing the core into the titanium tubing prior to seed
welding
.
|
·
|
Seed
Welding.
Following
production of the internal core and placement into the titanium
capsule, a
seed is hermetically sealed to produce a sealed radioactive source
and
biocompatible medical device. This manufacturing technology requires:
accurate placement of seed components with respect to the welding
head,
accurate control of welding parameters to ensure uniform temperature
and
depth control of the weld, quality control assessment of the weld
integrity, and removal of the finished product for downstream processing
or rejection of unacceptable materials to waste. Inspection systems
are
capable of identifying and classifying these variations for quality
control ensuring less material is wasted. Finally, the rapid placement
and
removal of components from the welding zone will affect overall
product
throughput.
|
·
|
Quality
Control
.
We
have established procedures and controls to meet all FDA and ISO
9001:2000
Quality Standards. Product quality and reliability will be secured
by
utilizing multiple sources of irradiation services, feedstock material,
and other seed manufacturing components. An intensive production
line
preventive maintenance and spare parts program will be implemented.
Also,
an ongoing training program will be established for customer service
to
ensure that all regulatory requirements for the FDA, DOT and applicable
nuclear radiation and health authorities are fulfilled.
|
·
|
Loose
seeds
|
·
|
Pre-loaded
needles
(loaded with 3 to 5 seeds and spacers)
|
·
|
Strands
of seeds
(consists of seeds and spacers in a biocompatible "shrink wrap")
|
·
|
Pre-loaded
Mick cartridges
(fits the Mick applicator - seed manufacturers usually load and sterilize
Mick cartridges in their own manufacturing
facilities)
|
Chicago
Prostate Cancer Center
|
Westmont,
IL
|
Community
Hospital of Los Gatos
|
Los
Gatos, CA
|
Name
|
Age
|
Position
with IsoRay Medical, Inc.
|
Lane
Bray
|
77
|
Chief
Chemist
|
Garrett
Brown
|
43
|
Chief
Technology Officer
|
Oleg
Egorov
|
36
|
Director
of Radiochemical Development
|
Lisa
Mayfield
|
37
|
Director
of Operations
|
Keith
Welsch
|
59
|
Chief
Quality Officer
|
|
Annual
Compensation
|
Long-Term
Compensation Awards
|
||||||||||||||
Name
and Principal Position
|
Fiscal
Year
(1)
|
Salary
|
Restricted
Stock Awards
|
Securities
Underlying Options
|
All
Other Compensation
|
|||||||||||
Roger
Girard, Chief Executive Officer
(2)
|
2005
|
$
|
113,958
|
--
|
--
|
--
|
||||||||||
2004
|
$
|
71,031
|
$
|
9,900
|
513,840
|
--
|
||||||||||
2003
|
$
|
4,000
|
$
|
49,900
|
--
|
--
|
||||||||||
Thomas
Scallen, Former Chief Executive Officer
(3)
|
2005
|
--
|
--
|
--
|
$
|
50,000
(4
|
)
|
|||||||||
2004
|
--
|
$
|
7,871
|
--
|
--
|
|||||||||||
2003
|
--
|
--
|
--
|
--
|
Number
of Securities Underlying Unexercised Options at Fiscal
Year-End(#)
|
Value
of Unexercised In-the-Money Options at Fiscal Year-End($)
|
||||||||||||||||||
Name
|
Number
of Shares Acquired on Exercise (#)
|
Value
Realized ($)
|
Exercisable
|
Unexercisable
|
Exercisable
|
Unexercisable
|
|||||||||||||
Roger
Girard
(1)
|
0
|
0
|
0
|
0
|
n/a
|
n/a
|
|||||||||||||
Thomas
Scallen
|
0
|
0
|
0
|
0
|
n/a
|
n/a
|
COMMON
STOCK SHARE OWNERSHIP AS OFAPRIL 25, 2006
|
|||||||||||||
Name
and Address of Beneficial Owner
(1)
|
Amount
of Common Shares Owned
|
Derivative
Securities Exercisable or Convertible Within 60 Days of April 25,
2006
|
Total
Common Shares Beneficially Owned
|
Percent
of Common Shares Owned
(2)
|
|||||||||
Roger
Girard, Chief Executive
Officer,
President and
Chairman
|
338,460
|
513,841
|
852,301
|
5.60
|
%
|
||||||||
Michael
Dunlop, Chief
Financial
Officer
|
136,618
|
150,000
|
286,618
|
1.93
|
%
|
||||||||
David
Swanberg, Exec. Vice
President
and Director
|
314,327
|
165,500
|
479,827
|
3.22
|
%
|
||||||||
Robert
Kauffman, Director
|
43,801
|
100,000
|
143,801
|
0.97
|
%
|
||||||||
Thomas
Lavoy, Director
|
8,426
|
100,000
|
108,426
|
0.73
|
%
|
||||||||
Stephen
Boatwright, Director
|
0
|
184,236
|
184,236
|
1.24
|
%
|
||||||||
Albert
Smith, Director
|
108,947
|
50,000
|
158,947
|
1.08
|
%
|
||||||||
Dwight
Babcock, Director
|
42,402
|
50,000
|
92,402
|
0.63
|
%
|
||||||||
Thomas
Scallen, Former Chief
Executive
Officer
(4)
|
329,942
|
0
|
329,942
|
2.24
|
%
|
||||||||
Lawrence
Family Trust
(5)
|
888,529
|
0
|
888,529
|
6.04
|
%
|
||||||||
Anthony
Silverman
(6)
|
624,699
|
321,391
|
946,090
|
6.29
|
%
|
||||||||
All
Officers and Directors
|
|||||||||||||
as
a group (8 persons)
|
1,002,277
|
1,589,364
|
2,591,641
|
15.89
|
%
|
(1)
|
Except
as otherwise noted, the address for each of these individuals is
c/o
IsoRay, Inc., 350 Hills St., Suite 106, Richland, WA
99354.
|
(2)
|
Percentage
ownership is based on 14,717,686 shares of Common Stock outstanding
on
April 25, 2006. Shares of Common Stock subject to stock options,
warrants
or convertible debentures which are currently exercisable/convertible
or
will become exercisable/convertible within 60 days after April
25, 2006
are deemed outstanding for computing the percentage ownership of
the
person or group holding such options, but are not deemed outstanding
for
computing the percentage ownership of any other person or group.
|
(3)
|
Mr.
Scallen's address is 4701 IDS Center, Minneapolis, MN 55402.
|
(4)
|
The
address of the Lawrence Family Trust is 285 Dondero Way, San Jose,
CA
95119.
|
(5)
|
Mr.
Silverman’s address is 2747 Paradise Road, #903, Las Vegas, NY 98109.
64,876 of the shares of common stock and 37,500 of the derivative
securities beneficially owned by Mr. Silverman are held of record
by
Katsinam Partners, LP, an entity of which Mr. Silverman is a member
of the
general partner.
|
|
Name
|
Beneficial
Ownership Before the Offering
(1)
|
Percentage
of Common Stock Owned Before Offering
|
Shares
of Common Stock Included in Prospectus
(2)
|
Shares
of Common Stock Issuable Upon Conversion or Exercise of Preferred
Stock,
Options or Warrants Included in Prospectus
(3)
|
Exercise
Price of Option or Warrant Included in Prospectus
|
Grant
Date of Option or Warrant Included in Prospectus
|
Term
of Option or Warrant Included in Prospectus
|
Total
Shares of Common Stock Included in Prospectus
|
Ownership
Footnote
|
Beneficial
ownership After the Offering
(4)
|
Percentage
of Common Stock Owned After Offering
(4)
|
|||||||||||||||||||||||
Agger
Capital
|
3,832
|
*
|
3,832
|
.59
- 2.37
|
3/25/2005
|
3/25/2007
|
3,832
|
6
|
0
|
*
|
||||||||||||||||||||||||
Alan
E. Waltar and Anna E. Waltar, Trustees of the Alan E. and Anna
E. Waltar
Trust U/A DTD 7/3/98
|
57,982
|
*
|
7,480
|
-
|
7,480
|
1
|
50,502
|
*
|
||||||||||||||||||||||||||
All
Seasons Painting Co. (Richard Rusch)
|
21,327
|
*
|
4,265
|
-
|
4,265
|
2
|
17,062
|
*
|
||||||||||||||||||||||||||
Anastassatos, Efthimios Christopher | 14,819 |
*
|
4,819
|
-
|
4,819
|
4
|
10,000
|
*
|
||||||||||||||||||||||||||
Babcock,
Dwight W.
|
102,207
|
*
|
22,962
|
-
|
22,962
|
3,8
|
79,245
|
*
|
||||||||||||||||||||||||||
Babcock,
Elaine
|
2,695
|
*
|
539
|
-
|
539
|
8
|
2,156
|
*
|
||||||||||||||||||||||||||
Bales,
Matt
|
5,178
|
*
|
1,036
|
-
|
1,036
|
7
|
4,142
|
*
|
||||||||||||||||||||||||||
Bartholomew,
Richard & Suzanne
|
17,772
|
*
|
3,554
|
-
|
3,554
|
2
|
14,218
|
*
|
||||||||||||||||||||||||||
Bates,
Christopher Matthew
|
4,265
|
*
|
853
|
-
|
853
|
2
|
3,412
|
*
|
||||||||||||||||||||||||||
Bates,
Robert and Lisa
|
47,873
|
*
|
16,335
|
-
|
16,335
|
1,2,3
|
31,538
|
*
|
||||||||||||||||||||||||||
Bavispe
Limited Partnership (Robert Caylor)
|
126,283
|
*
|
14,235
|
-
|
14,235
|
3
|
112,048
|
1.28
|
%
|
|||||||||||||||||||||||||
Bear
Stearns Securities Corporation Custodian Michael Eric Jacobson
IRA
(10)
|
10,950
|
*
|
10,950
|
-
|
10,950
|
3
|
0
|
*
|
||||||||||||||||||||||||||
Bear
Stearns Securities Corporation Custodian Mishawn Marie Nelson
IRA
|
10,950
|
*
|
10,950
|
-
|
10,950
|
3
|
0
|
*
|
||||||||||||||||||||||||||
Bear
Stearns Securities Corporation Custodian Steven Mark Nelson
IRA
(10)
|
10,950
|
*
|
10,950
|
-
|
10,950
|
3
|
0
|
*
|
||||||||||||||||||||||||||
Berglin,
Bruce D. and Doneda E.
|
15,475
|
*
|
5,475
|
-
|
5,475
|
3
|
10,000
|
*
|
||||||||||||||||||||||||||
Berglund,
Greg
|
35,769
|
*
|
15,769
|
-
|
15,769
|
3,4
|
20,000
|
*
|
||||||||||||||||||||||||||
Betty
McCormick Trust
|
7,108
|
*
|
1,422
|
-
|
1,422.
|
2
|
5,686
|
*
|
||||||||||||||||||||||||||
Bock,
Daniel
|
18,072
|
*
|
18,072
|
-
|
18,072
|
4
|
0
|
*
|
||||||||||||||||||||||||||
Boesel,
John
(10)
|
1,084
|
*
|
1,084
|
$
|
0.59
- 2.37
|
3/25/2005
|
3/25/2007
|
1,084
|
6
|
0
|
*
|
|||||||||||||||||||||||
Boggess,
Thomas S. IV and Jonette D. JTROS
|
36,145
|
*
|
36,145
|
-
|
36,145
|
4
|
0
|
*
|
||||||||||||||||||||||||||
Boland,
John C.
|
28,437
|
*
|
5,687
|
-
|
5,687
|
2
|
22,750
|
*
|
||||||||||||||||||||||||||
Boland,
John L.
|
116,098
|
*
|
10,384
|
7,109
|
17,493
|
1,2
|
98,605
|
1.13
|
%
|
|||||||||||||||||||||||||
Bonanza,
LLC (David and Donna Whitehead)
|
39,672
|
*
|
25,454
|
-
|
25,454
|
2,3
|
14,218
|
*
|
||||||||||||||||||||||||||
Boster,
Gary
|
29,399
|
*
|
29,399
|
-
|
29,399
|
5
|
0
|
*
|
||||||||||||||||||||||||||
Bragdon,
George and Barbara
|
2,105
|
*
|
421
|
-
|
421
|
8
|
1,684
|
*
|
||||||||||||||||||||||||||
Brown
Larsen, Pamela
|
14,218
|
*
|
2,844
|
2,844
|
2
|
11,374
|
*
|
|||||||||||||||||||||||||||
Brown,
Alexis and Alan
|
4,211
|
*
|
842
|
-
|
842
|
8
|
3,369
|
*
|
||||||||||||||||||||||||||
Brown,
Anne J.
|
14,218
|
*
|
2,844
|
-
|
2,844
|
2
|
11,374
|
*
|
||||||||||||||||||||||||||
Brown,
Garrett N.
(6)
|
552,237
|
4.13
|
%
|
31,546
(7
|
)
|
-
|
31,546
|
1
|
520,691
|
5.97
|
%
|
|||||||||||||||||||||||
Bunting,
Brandt E. & Collen M.
|
38,435
|
*
|
5,687
|
-
|
5,687
|
2
|
32,748
|
*
|
||||||||||||||||||||||||||
Burstein,
Fred
|
290,016
|
2.17
|
%
|
290,016
|
-
|
290,016
|
5
|
0
|
*
|
|||||||||||||||||||||||||
Burstein,
Fred IRA
|
16,425
|
*
|
16,425
|
-
|
16,425
|
3
|
0
|
*
|
||||||||||||||||||||||||||
Cangiane,
Lorraine and Gilson, Bernard
|
10,950
|
*
|
10,950
|
-
|
10,950
|
3
|
0
|
*
|
||||||||||||||||||||||||||
Carroll,
Bridget M.
|
14,218
|
*
|
14,218
|
-
|
14,218
|
2
|
0
|
*
|
||||||||||||||||||||||||||
Chapman,
Milton A
|
48,782
|
*
|
9,756
|
-
|
9,756
|
1
|
39,026
|
*
|
||||||||||||||||||||||||||
Clark,
R. Jeanne
|
25,541
|
*
|
4,878
|
230
|
5,108
|
2
|
20,433
|
*
|
||||||||||||||||||||||||||
Clement,
James H.
|
20,046
|
*
|
7,642
|
747
|
$
|
1.06
|
2/28/2005
|
2/28/2007
|
8,388
|
2,3
|
11,657
|
*
|
||||||||||||||||||||||
Clerf,
Craig
|
1,300
|
*
|
260
|
-
|
260
|
1
|
1,040
|
*
|
||||||||||||||||||||||||||
Clerf,
Robert
|
1,950
|
*
|
390
|
-
|
390
|
1
|
1,560
|
*
|
Clerf,
Roger
|
3,251
|
*
|
650
|
-
|
650
|
1
|
2,601
|
*
|
||||||||||||||||||||||||||
Cohen,
Loren
|
26,426
|
*
|
16,426
|
-
|
16,426
|
3
|
10,000
|
*
|
||||||||||||||||||||||||||
Collier
Living Trust
|
44,885
|
*
|
7,545
|
-
|
7,545
|
2
|
37,340
|
*
|
||||||||||||||||||||||||||
Cone-Gilreath
Law Firm(Douglas Nicholson)
|
48,782
|
*
|
9,756
|
-
|
9,756
|
1
|
39,026
|
*
|
||||||||||||||||||||||||||
Conner
III, Thomas E.
|
33,698
|
*
|
4,740
|
-
|
4,740
|
2
|
28,958
|
*
|
||||||||||||||||||||||||||
Craddock,
Steven Lee
|
7,229
|
*
|
7,228
|
-
|
7,228
|
4
|
1
|
*
|
||||||||||||||||||||||||||
Daniels,
Frederic R. & Anita C. Family Trust
|
72,477
|
*
|
9,597
|
2,488
|
$
|
1.06
|
2/28/2005
|
2/28/2007
|
12,085
|
2
|
60,391
|
*
|
||||||||||||||||||||||
Daswick,
Gregory
|
10,663
|
*
|
2,133
|
-
|
2,133
|
2,3
|
8,530
|
*
|
||||||||||||||||||||||||||
Daswick,
Michael and Kimberly
|
62,943
|
*
|
8,589
|
-
|
8,589
|
2,3
|
54,354
|
*
|
||||||||||||||||||||||||||
DFC
401(k) Profit Sharing Plan FBO Benjamin J. Schwartz
|
24,882
|
*
|
5,564
|
-
|
5,564
|
2
|
19,318
|
*
|
||||||||||||||||||||||||||
Douglas
D. Thornton Family Trust
|
308,957
|
2.31
|
%
|
61,791
|
-
|
61,791
|
1
|
247,166
|
2.83
|
%
|
||||||||||||||||||||||||
Dunlop,
Michael
(5)
(6)
|
286,618
|
2.14
|
%
|
24,746
(7
|
)
|
-
|
24,746
|
1
|
261,872
|
3.00
|
%
|
|||||||||||||||||||||||
Ecclestone,
Andrew
|
59,842
|
*
|
59,842
|
-
|
59,842
|
4
|
0
|
*
|
||||||||||||||||||||||||||
Edmund,
Robert
|
3,369
|
*
|
674
|
-
|
674
|
8
|
2,695
|
*
|
||||||||||||||||||||||||||
Engels,
Kevin F.
|
18,423
|
*
|
1,685
|
-
|
1,685
|
8
|
16,738
|
*
|
||||||||||||||||||||||||||
Fabri,
Jon
|
43,423
|
*
|
1,685
|
-
|
1,685
|
8
|
41,738
|
*
|
||||||||||||||||||||||||||
Falls
Rd LLC (Paul Hatch)
|
23,698
|
*
|
4,740
|
-
|
4,740
|
2
|
18,958
|
*
|
||||||||||||||||||||||||||
Feder,
Dr. Henry
|
14,218
|
*
|
2,844
|
-
|
2,844
|
2
|
11,374
|
*
|
||||||||||||||||||||||||||
Feidelberg,
Steven O. and Codini, Anna-Maria, Trustees of the Feidelberg-Codini
Family
Trust U/T/A dated April 15, 2003
|
6,024
|
*
|
6,024
|
-
|
6,024
|
4
|
0
|
*
|
||||||||||||||||||||||||||
Fernandez,
Leslie
|
3,688
|
*
|
738
|
738
|
2
|
2,950
|
*
|
|||||||||||||||||||||||||||
Ferrick,
Patrick N.
|
9,479
|
*
|
1,896
|
-
|
1,896
|
2
|
7,583
|
*
|
||||||||||||||||||||||||||
Fookes,
Larry
|
46,529
|
*
|
3,577
|
22,914
|
$
|
1.19
|
8/1/2005
|
7/31/2015
|
26,491
|
2,6
|
20,038
|
*
|
||||||||||||||||||||||
Fookes,
Sharon
|
3,553
|
*
|
711
|
-
|
711
|
2
|
2,842
|
*
|
Forest
Ridge Properties, Ltd. (Beverly Unger)
|
12,441
|
*
|
1,244
|
1,244
|
$
|
1.40
|
2/28/2005
|
2/28/2007
|
2,488
|
2
|
9,953
|
*
|
||||||||||||||||||||||
Forsman,
John Arvid
|
14,218
|
*
|
2,844
|
2,844
|
2
|
11,374
|
*
|
|||||||||||||||||||||||||||
Freeman,
Kevin
|
22,440
|
*
|
2,488
|
-
|
2,488
|
2
|
19,952
|
*
|
||||||||||||||||||||||||||
Gainer,
Ronald G. & Linda J.
|
14,218
|
*
|
2,844
|
-
|
2,844
|
2
|
11,374
|
*
|
||||||||||||||||||||||||||
Gaines,
Ira J.
|
30,950
|
*
|
10,950
|
-
|
10,950
|
2,3
|
20,000
|
*
|
||||||||||||||||||||||||||
Galanty,
Thomas M.
|
10,950
|
*
|
10,950
|
-
|
10,950
|
3
|
0
|
*
|
||||||||||||||||||||||||||
Giammattei,
Shawn and Peggy
|
252
|
*
|
50
|
-
|
50
|
8
|
202
|
*
|
||||||||||||||||||||||||||
Girard,
Roger E.
(5) (6)
|
852,301
|
6.38
|
%
|
73,285
(7
|
)
|
-
|
73,285
|
1,6
|
779,016
|
8.92
|
%
|
|||||||||||||||||||||||
Gold
Trust Co FBO Don Goeckner IRA
|
86,733
|
*
|
17,346
|
-
|
17,346
|
2
|
69,387
|
*
|
||||||||||||||||||||||||||
Goldsmith,
Hugh G.
|
18,959
|
*
|
3,792
|
3,792
|
2
|
15,167
|
*
|
|||||||||||||||||||||||||||
Goodrich,
Daniel A
|
10,950
|
*
|
10,950
|
-
|
10,950
|
3
|
0
|
*
|
||||||||||||||||||||||||||
Granger,
Jamie
|
10,529
|
*
|
2,106
|
2,106
|
8
|
8,423
|
*
|
|||||||||||||||||||||||||||
Griffith,
Richard and Barbara
|
17,772
|
*
|
3,554
|
-
|
3,554
|
2
|
14,218
|
*
|
||||||||||||||||||||||||||
Hartley,
James N.
|
9,479
|
*
|
1,896
|
1,896
|
2
|
7,583
|
*
|
|||||||||||||||||||||||||||
Hedstrom,
Gary A.
|
12,527
|
*
|
505
|
-
|
505
|
8
|
12,022
|
*
|
||||||||||||||||||||||||||
Hernandez,
Jesus and Melissa
|
16,955
|
*
|
5,581
|
-
|
5,581
|
2
|
11,374
|
*
|
||||||||||||||||||||||||||
Holcomb,
Sr,, Hampton A.
|
10,950
|
*
|
10,950
|
-
|
10,950
|
3
|
0
|
*
|
||||||||||||||||||||||||||
Hostetler
Living Trust
|
18,957
|
*
|
1,896
|
1,896
|
3,791
|
2
|
15,166
|
*
|
||||||||||||||||||||||||||
Huls,
Michael, Roth IRA
|
33,000
|
*
|
33,000
|
-
|
33,000
|
6
|
0
|
*
|
||||||||||||||||||||||||||
Intellegration,
LLP(Christopher Smith)
|
35,526
|
*
|
25,526
|
-
|
25,526
|
6
|
10,000
|
*
|
||||||||||||||||||||||||||
Jackson,
John J. & Ellen K.
|
14,218
|
*
|
2,844
|
-
|
2,844
|
2
|
11,374
|
*
|
||||||||||||||||||||||||||
James
J. Minder & Susan A. Davis Family Trust
|
10,950
|
*
|
10,950
|
-
|
10,950
|
3
|
0
|
*
|
||||||||||||||||||||||||||
Johnson,
Carolyn M.
|
8,422
|
*
|
1,684
|
-
|
1,684
|
8
|
6,738
|
*
|
||||||||||||||||||||||||||
Johnson,
Tom and Lindsay
|
8,422
|
*
|
1,684
|
-
|
1,684
|
8
|
6,738
|
*
|
Kaiser,
James S.
|
10,950
|
*
|
10,950
|
-
|
10,950
|
3
|
0
|
*
|
||||||||||||||||||||||||||
Kalos,
Shaun and Cathy
|
2,105
|
*
|
421
|
-
|
421
|
8
|
1,684
|
*
|
||||||||||||||||||||||||||
Kang,
Dr. Young S.
|
16,260
|
*
|
3,252
|
-
|
3,252
|
2
|
13,008
|
*
|
||||||||||||||||||||||||||
Kaser,
Kathryn and John Clark Kaser
|
710
|
*
|
142
|
-
|
142
|
2
|
568
|
*
|
||||||||||||||||||||||||||
Kaser,
Kathryn and John Lucas Kaser
|
1,065
|
*
|
213
|
-
|
213
|
2
|
852
|
*
|
||||||||||||||||||||||||||
Kaser,
Kathryn and Jordan Rae Emmil
|
1,065
|
*
|
213
|
-
|
213
|
2
|
852
|
*
|
||||||||||||||||||||||||||
Kaser,
Kathryn and Kenneth Tyler Emmil
|
1,065
|
*
|
213
|
-
|
213
|
2
|
852
|
*
|
||||||||||||||||||||||||||
Kaser,
Kathryn and Laura Kaser Emmil
|
710
|
*
|
142
|
-
|
142
|
2
|
568
|
*
|
||||||||||||||||||||||||||
Kaser,
Kathryn and Levi Clark Kaser
|
1,065
|
*
|
213
|
-
|
213
|
2
|
852
|
*
|
||||||||||||||||||||||||||
Kauffman,
Robert R.
(5)
|
110,950
|
*
|
10,950
|
-
|
10,950
|
3
|
100,000
|
1.15
|
%
|
|||||||||||||||||||||||||
Kelly,
Gerald
|
4,211
|
*
|
842
|
-
|
842
|
8
|
3,369
|
*
|
||||||||||||||||||||||||||
Kelly,
Richard
|
1,675
|
*
|
1,675
|
$
|
.59
- 2.37
|
3/25/2005
|
3/25/2007
|
1,675
|
6
|
0
|
*
|
|||||||||||||||||||||||
Kemeny,
Matthias D.
|
10,950
|
*
|
10,950
|
-
|
10,950
|
3
|
0
|
*
|
||||||||||||||||||||||||||
Kennedy,
Patrick H. & Bonnie M.
(6)
|
54,506
|
*
|
10,941
(7
|
)
|
-
|
10,941
|
2
|
43,565
|
*
|
|||||||||||||||||||||||||
Klostermann,
Bill and Donna JTWROS
|
16,425
|
*
|
16,425
|
-
|
16,425
|
3
|
0
|
*
|
||||||||||||||||||||||||||
Kocherer,
Rosalee
|
2,105
|
*
|
421
|
-
|
421
|
8
|
1,684
|
*
|
||||||||||||||||||||||||||
Konietzko,
Neil
|
198,423
|
1.48
|
%
|
1,685
|
-
|
1,685
|
8
|
196,738
|
2.25
|
%
|
||||||||||||||||||||||||
Korb,
Leroy J. MD
|
248,368
|
1.86
|
%
|
45,530
|
20,716
|
$
|
1.19
|
8/1/2005
|
7/31/2015
|
66,246
|
1
|
182,122
|
2.09
|
%
|
||||||||||||||||||||
Koslowski,
Barbara
|
8,129
|
*
|
1,626
|
-
|
1,626
|
1
|
6,503
|
*
|
||||||||||||||||||||||||||
Kryszek,
Jakob
|
40,522
|
*
|
8,104
|
-
|
8,104
|
2
|
32,418
|
*
|
||||||||||||||||||||||||||
Lambert,
Pat
(10)
|
113,195
|
*
|
33,000
|
14,674
|
$
|
.59
- 2.37
|
3/25/2005
|
3/25/2007
|
47,674
|
6
|
65,521
|
*
|
||||||||||||||||||||||
Lane
A. & Gwen M. Bray Trust
(6)
|
386,997
|
2.90
|
%
|
71,142
(7
|
)
|
-
|
71,142
|
1,2
|
315,855
|
3.62
|
%
|
|||||||||||||||||||||||
Lanza,
Costantio IRA Charles Schwab & Co., Inc. Custodian
|
10,950
|
*
|
10,950
|
-
|
10,950
|
3
|
0
|
*
|
||||||||||||||||||||||||||
Larson,
Damian
|
14,320
|
*
|
2,864
|
-
|
2,864
|
8
|
11,456
|
*
|
||||||||||||||||||||||||||
Lavoy,
Thomas
(5)
|
108,423
|
*
|
1,685
|
-
|
1,685
|
8
|
106,738
|
1.22
|
%
|
|||||||||||||||||||||||||
Lawrence
Family Trust
(6)
|
888,529
|
6.65
|
%
|
177,706
(7
|
)
|
-
|
177,706
|
1
|
710,823
|
8.14
|
%
|
|||||||||||||||||||||||
Lebowitz
Living Trust
|
142,188
|
1.06
|
%
|
28,438
|
-
|
28,438
|
2
|
113,750
|
1.30
|
%
|
||||||||||||||||||||||||
Little,
John W. and Marina Zeiber
|
9,639
|
*
|
6,024
|
-
|
6,024
|
4
|
3,615
|
*
|
||||||||||||||||||||||||||
Livingston,
James P. & Keri Segna
|
24,218
|
*
|
2,844
|
-
|
2,844
|
2
|
21,374
|
*
|
||||||||||||||||||||||||||
Lord,
Brandon
|
421
|
*
|
84
|
-
|
84
|
8
|
337
|
*
|
||||||||||||||||||||||||||
Lord,
Leonard L. and Patricia G.
|
4,211
|
*
|
842
|
-
|
842
|
8
|
3,369
|
*
|
||||||||||||||||||||||||||
MacKay,
Daniel P
|
18,015
|
*
|
3,603
|
-
|
3,603
|
2
|
14,412
|
*
|
||||||||||||||||||||||||||
Madsen,
James L.
|
166,706
|
1.25
|
%
|
27,130
|
-
|
$
|
1.19
|
8/1/2005
|
7/31/2015
|
27,130
|
1
|
139,576
|
1.60
|
%
|
||||||||||||||||||||
Majchrowski,
Thomas
|
75,401
|
*
|
15,080
|
-
|
15,080
|
1
|
60,321
|
*
|
||||||||||||||||||||||||||
Marlin
Hull LLC (Michael Huls)
|
179,422
|
1.34
|
%
|
179,422
|
-
|
179,422
|
6
|
0
|
*
|
|||||||||||||||||||||||||
Martin,
Leslie A
|
14,218
|
*
|
2,844
|
2,844
|
2
|
11,374
|
*
|
|||||||||||||||||||||||||||
Matsock,
Mark
|
113,721
|
*
|
10,950
|
25,271
|
$
|
4.15
|
7/15/2005
|
7/15/2007
|
36,221
|
3,6
|
77,500
|
*
|
||||||||||||||||||||||
McInnis,
Greg and Cynthia Family Trust
|
7,229
|
*
|
7,228
|
-
|
7,228
|
4
|
1
|
*
|
||||||||||||||||||||||||||
McKenna,
Jean
|
16,260
|
*
|
3,252
|
-
|
3,252
|
2
|
13,008
|
*
|
||||||||||||||||||||||||||
Mebesius,
William
|
10,950
|
*
|
10,950
|
-
|
10,950
|
3
|
0
|
*
|
||||||||||||||||||||||||||
Meyers
Associates LP
(10)
|
47,828
|
*
|
14,674
|
$
|
.59
- 2.37
|
3/25/2005
|
3/25/2007
|
14,674
|
6
|
33,154
|
*
|
|||||||||||||||||||||||
Miller,
Thomas F.
|
289,159
|
2.16
|
%
|
289,159
|
-
|
289,159
|
5
|
0
|
*
|
|||||||||||||||||||||||||
Moore,
Terry R
|
15,426
|
*
|
7,464
|
-
|
7,464
|
2
|
7,962
|
*
|
||||||||||||||||||||||||||
Moseley,
Gerard F.
|
9,526
|
*
|
1,905
|
-
|
1,905
|
2
|
7,621
|
*
|
||||||||||||||||||||||||||
Moss,
Lynette F.
|
44,438
|
*
|
15,249
|
-
|
15,249
|
4,8
|
29,189
|
*
|
||||||||||||||||||||||||||
Mountain
View Asset Management (Andrew Eccleston)
|
24,096
|
*
|
24,096
|
-
|
24,096
|
4
|
0
|
*
|
||||||||||||||||||||||||||
MountainView
Opportunistic Growth Fund LP (Andrew Eccleston)
|
94,223
|
*
|
30,745
|
-
|
30,745
|
3,8
|
63,478
|
*
|
||||||||||||||||||||||||||
Muldoon,
William G and Janet L
|
126,854
|
*
|
26,022
|
2,488
|
$
|
1.06
|
2/28/2005
|
2/28/2007
|
28,510
|
2,3
|
98,344
|
1.13
|
%
|
Murphy,
Tom
|
3,369
|
*
|
674
|
-
|
674
|
8
|
2,695
|
*
|
||||||||||||||||||||||||||
Newman,
Bruce W. & Jeannie G.
|
16,587
|
*
|
3,318
|
-
|
3,318
|
2
|
13,269
|
*
|
||||||||||||||||||||||||||
Nichols,
Dale and Kathyrn E. Kaser
|
17,772
|
*
|
3,554
|
-
|
3,554
|
2
|
14,218
|
*
|
||||||||||||||||||||||||||
Oak
Ridge Financial Group Inc.
(10)
|
3,285
|
*
|
3,285
|
$
|
.59
- 2.37
|
3/25/2005
|
3/25/2007
|
3,285
|
6
|
0
|
*
|
|||||||||||||||||||||||
Oliver,
Marlene
|
58,322
|
*
|
44,002
|
$
|
1.19
|
8/1/2005
|
7/31/2015
|
44,002
|
1
|
14,320
|
*
|
|||||||||||||||||||||||
Olson,
Claire A & Mary Ann
|
14,218
|
*
|
2,844
|
-
|
2,844
|
2
|
11,374
|
*
|
||||||||||||||||||||||||||
Onwuegbusi,
Charles
|
10,950
|
*
|
10,950
|
-
|
10,950
|
3
|
0
|
*
|
||||||||||||||||||||||||||
Ott,
Suzann J & Dennis L.
|
40,546
|
*
|
7,109
|
-
|
7,109
|
2
|
33,437
|
*
|
||||||||||||||||||||||||||
Palitz,
Louis and Ruth
|
17,772
|
*
|
3,554
|
-
|
3,554
|
2
|
14,218
|
*
|
||||||||||||||||||||||||||
Peterson,
Jerry
|
38,326
|
*
|
38,326
|
-
|
38,326
|
3
|
0
|
*
|
||||||||||||||||||||||||||
Pinnacle
International Holdings LLC (Cliff Aaron)
|
177,736
|
1.33
|
%
|
7,109
|
28,438
|
$
|
0.70
|
11/29/2005
|
10/30/2006
- 03/30/2007
|
35,547
|
2,6
|
142,189
|
1.63
|
%
|
||||||||||||||||||||
Press,
Richard
|
227,652
|
1.70
|
%
|
45,530
|
-
|
45,530
|
1,6
|
182,122
|
2.09
|
%
|
||||||||||||||||||||||||
Quatsch
Ventures, LLC (Stephen Boatwright)
(5)
|
84,236
|
*
|
84,236
|
$
|
1.19
|
8/1/2005
|
7/31/2015
|
84,236
|
6
|
0
|
*
|
|||||||||||||||||||||||
Reynolds,
J. Scott
|
6,024
|
*
|
6,024
|
-
|
6,024
|
4
|
0
|
*
|
||||||||||||||||||||||||||
Roberts,
Cory B.
|
1,263
|
*
|
253
|
-
|
253
|
2
|
1,010
|
*
|
||||||||||||||||||||||||||
Roberts,
Donald
|
4,211
|
*
|
842
|
-
|
842
|
2
|
3,369
|
*
|
||||||||||||||||||||||||||
Roberts,
Elizabeth
|
1,263
|
*
|
253
|
-
|
253
|
2
|
1,010
|
*
|
||||||||||||||||||||||||||
Roberts,
Joshua
|
2,947
|
*
|
589
|
-
|
589
|
2
|
2,358
|
*
|
||||||||||||||||||||||||||
Roberts,
Leslie and Rex Armstrong
|
10,950
|
*
|
10,950
|
-
|
10,950
|
3
|
0
|
*
|
||||||||||||||||||||||||||
Rogers,
Philip and Stephanie
(9)
|
8,245
|
*
|
8,245
|
-
|
8,245
|
5
|
0
|
*
|
||||||||||||||||||||||||||
Roman,
Patrick and Nichole
|
1,052
|
*
|
210
|
-
|
210
|
8
|
842
|
*
|
||||||||||||||||||||||||||
Ronald
L and Susan R. Kathren Trust
|
5,171
|
*
|
5,170
|
$
|
1.19
|
8/1/2005
|
7/31/2015
|
5,170
|
1
|
1
|
*
|
|||||||||||||||||||||||
Root,
R. William, Jr.
|
176,157
|
1.32
|
%
|
37,131
|
-
|
37,131
|
1,3
|
139,026
|
1.59
|
%
|
||||||||||||||||||||||||
Roozen,
Richard and Jaynie
|
5,474
|
*
|
5,474
|
-
|
5,474
|
3
|
0
|
*
|
||||||||||||||||||||||||||
Rothstein,
Alan F.
|
35,546
|
*
|
7,109
|
-
|
7,109
|
2
|
28,437
|
*
|
||||||||||||||||||||||||||
Rothstein,
Lawrence R. and Deborah E.
|
74,096
|
*
|
24,096
|
-
|
24,096
|
3
|
50,000
|
*
|
||||||||||||||||||||||||||
Rowland,
Chris C.
|
10,475
|
*
|
5,475
|
-
|
5,475
|
3
|
5,000
|
*
|
||||||||||||||||||||||||||
Rowland,
Joseph Perry Jr.
|
5,475
|
*
|
5,475
|
-
|
5,475
|
3
|
0
|
*
|
||||||||||||||||||||||||||
Ruth
Schwartz Trust
|
60,716
|
*
|
12,143
|
-
|
12,143
|
2
|
48,573
|
*
|
||||||||||||||||||||||||||
Safdi
Investments Limited Partnership (Rosemary Safdi)
|
62,921
|
*
|
34,484
|
-
|
34,484
|
2,3
|
28,437
|
*
|
||||||||||||||||||||||||||
Saito,
Dr. Robert N.
|
14,218
|
*
|
2,844
|
-
|
2,844
|
2
|
11,374
|
*
|
||||||||||||||||||||||||||
Sanders
Family Limited Partnership III (Vernon Sanders)
|
54,166
|
*
|
20,472
|
-
|
20,472
|
4,8
|
33,694
|
*
|
||||||||||||||||||||||||||
Scallen,
Thomas K.
(9)
|
329,942
|
2.47
|
%
|
329,942
|
-
|
329,942
|
5
|
0
|
*
|
|||||||||||||||||||||||||
Schatzmair,
Ralph
|
46,057
|
*
|
4,211
|
-
|
4,211
|
8
|
41,846
|
*
|
||||||||||||||||||||||||||
Schenter,
Robert
|
218,860
|
1.64
|
%
|
35,489
|
41,416
|
$
|
1.19
|
8/1/2005
|
7/31/2015
|
76,905
|
1
|
141,955
|
1.63
|
%
|
||||||||||||||||||||
Schipfer,
John D., Jr.
|
5,263
|
*
|
1,053
|
-
|
1,053
|
8
|
4,210
|
*
|
||||||||||||||||||||||||||
Schloz
Family 1998 Trust
|
10,950
|
*
|
10,950
|
-
|
10,950
|
3
|
0
|
*
|
||||||||||||||||||||||||||
Schloz,
Stanley
|
33,000
|
*
|
33,000
|
-
|
33,000
|
3
|
0
|
*
|
||||||||||||||||||||||||||
Schreifels,
Donald B
|
140,943
|
1.05
|
%
|
27,465
|
-
|
27,465
|
4,8
|
113,478
|
1.30
|
%
|
||||||||||||||||||||||||
Schwartz,
Jacob
|
15,950
|
*
|
10,950
|
-
|
10,950
|
3
|
5,000
|
*
|
||||||||||||||||||||||||||
Segna,
Donald R & Joan F.
(6)
|
511,213
|
3.82
|
%
|
96,515
(7
|
)
|
-
|
96,515
|
1
|
414,698
|
4.75
|
%
|
|||||||||||||||||||||||
Segna,
Jan M
|
14,218
|
*
|
2,844
|
-
|
2,844
|
2
|
11,374
|
*
|
||||||||||||||||||||||||||
Segna,
Todd D. & Deborah L.J. Chew
|
21,327
|
*
|
4,265
|
-
|
4,265
|
2
|
17,062
|
*
|
||||||||||||||||||||||||||
Selma
Teicher Trust, Stuart Teicher, Trustee
|
4,819
|
*
|
4,819
|
-
|
4,819
|
4
|
0
|
*
|
||||||||||||||||||||||||||
Shukov,
George
|
227,652
|
1.70
|
%
|
45,530
|
-
|
45,530
|
1,6
|
182,122
|
2.09
|
%
|
||||||||||||||||||||||||
Siddall,
John W.
|
104,752
|
*
|
54,752
|
-
|
54,752
|
3
|
50,000
|
*
|
||||||||||||||||||||||||||
Sidibe,
Aissata
|
35,546
|
*
|
7,109
|
7,109
|
2
|
28,437
|
*
|
Silverman,
Anthony
|
763,961
|
5.72
|
%
|
367,570
(8
|
)
|
139,391
|
$
|
4.15
|
7/15/2005
|
7/15/2007
|
506,961
|
3,5,6
|
257,000
|
2.94
|
%
|
|||||||||||||||||||
Silverman,
Anthony IRA Rollover
|
54,753
|
*
|
54,753
|
-
|
54,753
|
3
|
0
|
*
|
||||||||||||||||||||||||||
Silverman,
Jeff
|
72,776
|
*
|
6,110
|
$
|
.59
- 2.37
|
3/25/2005
|
3/25/2007
|
6,110
|
6
|
66,666
|
*
|
|||||||||||||||||||||||
Silverman,
Kay
|
24,096
|
*
|
24,096
|
-
|
24,096
|
4
|
0
|
*
|
||||||||||||||||||||||||||
Silverman,
Kay S. Revocable Trust
|
32,851
|
*
|
32,851
|
-
|
32,851
|
3
|
0
|
*
|
||||||||||||||||||||||||||
Smith,
Albert
(5)
|
171,447
|
1.28
|
%
|
21,789
|
12,500
|
$
|
0.0008
|
10/14/2005
|
10/13/2007
|
34,289
|
6,8
|
137,158
|
1.57
|
%
|
||||||||||||||||||||
Source
Capital Group
(10)
|
10,584
|
*
|
1,084
|
$
|
0.59
- 2.37
|
3/25/2005
|
3/25/2007
|
1,084
|
6
|
9,500
|
*
|
|||||||||||||||||||||||
Stack,
Peter R and Judy J
|
10,950
|
*
|
10,950
|
-
|
10,950
|
3
|
0
|
*
|
||||||||||||||||||||||||||
Stealth
Investments, Inc. (James Scannell)
|
44,876
|
*
|
27,376
|
-
|
27,376
|
3
|
17,500
|
*
|
||||||||||||||||||||||||||
Stenson,
Calvin B.
|
8,423
|
*
|
1,685
|
-
|
1,685
|
8
|
6,738
|
*
|
||||||||||||||||||||||||||
Sterne
Agee and Leach, Inc. C/F Jill Ryan IRA
|
5,474
|
*
|
5,474
|
-
|
5,474
|
3
|
0
|
*
|
||||||||||||||||||||||||||
Sterne
Agee and Leach, Inc. C/F Robert Ryan IRA
|
10,950
|
*
|
10,950
|
-
|
10,950
|
3
|
0
|
*
|
||||||||||||||||||||||||||
Sterne
Agee Leach FBO Barry K Griffith IRA
|
10,950
|
*
|
10,950
|
-
|
10,950
|
3
|
0
|
*
|
||||||||||||||||||||||||||
Stewart,
James P. and Patricia A.
|
10,950
|
*
|
10,950
|
-
|
10,950
|
3
|
0
|
*
|
||||||||||||||||||||||||||
Stiller,
David L & Bonita L.
|
54,740
|
*
|
10,451
|
498
|
$
|
1.06
|
2/28/2005
|
2/28/2007
|
10,949
|
2
|
43,792
|
*
|
||||||||||||||||||||||
Stokes,
William J.
|
78,052
|
*
|
15,610
|
-
|
15,610
|
1
|
62,442
|
*
|
||||||||||||||||||||||||||
Strain,
Audrey
|
4,975
|
*
|
995
|
-
|
995
|
2
|
3,980
|
*
|
||||||||||||||||||||||||||
Swanberg,
Daniel L. & Joni A.
|
9,479
|
*
|
1,896
|
-
|
1,896
|
2
|
7,583
|
*
|
||||||||||||||||||||||||||
Swanberg,
David J. & Janet C.
(5) (6)
|
448,827
|
3.36
|
%
|
58,047
(7
|
)
|
-
|
58,047
|
1,2
|
390,780
|
4.48
|
%
|
|||||||||||||||||||||||
The
Alan Gess Living Trust
|
36,327
|
*
|
4,265
|
-
|
4,265
|
2
|
32,062
|
*
|
||||||||||||||||||||||||||
The
Anderson Family Trust UTD 12/20/93
|
21,059
|
*
|
4,212
|
-
|
4,212
|
8
|
16,847
|
*
|
||||||||||||||||||||||||||
The
Bates Revocable Trust, Fred and Linda Bates, Trustees
|
37,144
|
*
|
6,283
|
-
|
6,283
|
2
|
30,861
|
*
|
||||||||||||||||||||||||||
The
Lanzer Revocable Living Trust
|
18,072
|
*
|
18,072
|
-
|
18,072
|
3
|
0
|
*
|
||||||||||||||||||||||||||
The
Nancy R. McCormick Family Trust U/A dated June 14,2002, John E
McCormick,
Trustee
|
4,819
|
*
|
4,819
|
-
|
4,819.
|
2
|
0
|
*
|
||||||||||||||||||||||||||
The
Smart Family Trust
|
15,450
|
*
|
6,469
|
-
|
6,469
|
2
|
8,981
|
*
|
||||||||||||||||||||||||||
Thomas,
Cam
|
56,875
|
*
|
11,375
|
-
|
11,375
|
2
|
45,500
|
*
|
||||||||||||||||||||||||||
Thompson,
April
|
4,975
|
*
|
995
|
-
|
995
|
2
|
3,980
|
*
|
||||||||||||||||||||||||||
Thompson,
Randy
|
4,975
|
*
|
995
|
-
|
995
|
2
|
3,980
|
*
|
||||||||||||||||||||||||||
Thompson,
William and Karen Trust
(6)
|
14,218
|
*
|
2,844
|
2,844
|
2
|
11,374
|
*
|
|||||||||||||||||||||||||||
Turchetta,
Anthony J
|
14,218
|
*
|
2,844
|
-
|
2,844
|
2
|
11,374
|
*
|
||||||||||||||||||||||||||
Turnbull,
Timothy L.
|
8,530
|
*
|
1,706
|
-
|
1,706
|
2
|
6,824
|
*
|
||||||||||||||||||||||||||
UBS
Financial Services IRA FBO Robert R Kauffman
(5)
|
32,851
|
*
|
32,851
|
-
|
32,851
|
3
|
0
|
*
|
||||||||||||||||||||||||||
Vencore
LLC
|
5,692
|
*
|
5,692
|
$
|
4.15
|
5/10/2004
|
5/10/2008
|
5,692
|
6
|
0
|
*
|
|||||||||||||||||||||||
Weber,
Ronald
|
4,211
|
*
|
842
|
-
|
842
|
8
|
3,369
|
*
|
||||||||||||||||||||||||||
Weinstein,
Ronald A 2004 Living Trust
|
9,479
|
*
|
1,896
|
-
|
1,896
|
2
|
7,583
|
*
|
||||||||||||||||||||||||||
Weinstein,
Ronald Alan and Cathy Lynn
|
99,765
|
*
|
9,953
|
-
|
9,953
|
2
|
89,812
|
1.03
|
%
|
|||||||||||||||||||||||||
West,
Ron H.
|
4,211
|
*
|
842
|
-
|
842
|
8
|
3,369
|
*
|
||||||||||||||||||||||||||
Whalen,
Ryan and Jennifer
|
1,052
|
*
|
210
|
-
|
210
|
8
|
842
|
*
|
||||||||||||||||||||||||||
Wilkie,
David J
|
8,423
|
*
|
1,685
|
-
|
1,685
|
8
|
6,738
|
*
|
||||||||||||||||||||||||||
William
Wesley Thompson & Karen Louise Thompson
Revocable
Trust Dated January 6, 1999
(6)
|
21,464
|
*
|
4,293
|
-
|
4,293
|
2
|
17,171
|
*
|
||||||||||||||||||||||||||
Wynnjam
Corp. (Michael Huls)
|
107,057
|
*
|
10,950
|
96,107
|
$
|
4.15
|
7/15/2005
|
7/15/2007
|
107,057
|
3,6
|
0
|
*
|
||||||||||||||||||||||
Zaragosa,
Ernesto
|
26,847
|
*
|
16,847
|
$
|
4.15
|
7/15/2005
|
7/15/2007
|
16,847
|
6
|
10,000
|
*
|
|||||||||||||||||||||||
Zielke,
David C. and Diane M.
|
34,123
|
*
|
6,825
|
-
|
6,825
|
2
|
27,298
|
*
|
||||||||||||||||||||||||||
Zimmerman,
Paul
|
21,327
|
*
|
4,265
|
-
|
4,265
|
2
|
17,062
|
*
|
||||||||||||||||||||||||||
Totals
|
13,365,905
|
73.66
|
%
|
4,004,264
|
632,835
|
4,637,100
|
8,728,806
|
70.73
|
%
|
*
|
Less
than one percent.
|
(1)
|
The
number and percentage of shares beneficially owned is determined
in
accordance with Rule 13d-3 of the Securities Exchange Act of 1934,
as
amended, and the information is not necessarily indicative of beneficial
ownership for any other purpose. Under such rule, beneficial ownership
includes any shares as to which the selling shareholder has sole
or shared
voting power or investment power and also any shares that the selling
shareholder has the right to acquire within 60 days.
|
(2)
|
The
actual number of shares of common stock offered in this prospectus,
and
included in the registration statement of which this prospectus is
a part,
includes such additional number of shares of common stock as may
be issued
or issuable upon conversion of the preferred stock and exercise of
the
options and warrants, as applicable, by reason of any stock split,
stock
dividend or similar transaction involving the common stock, in accordance
with Rule 416 under the Securities Act of 1933, as amended.
|
(3)
|
This
column includes all shares of common stock issuable upon conversion
of
preferred stock and exercise of options and warrants, as applicable,
held
by the named selling shareholder.
|
(4)
|
Assumes
that all securities registered will be sold.
|
(5)
|
These
selling shareholders are our executive officers and directors, or
are
entities controlled by our executive officers and
directors.
|
(6)
|
These
selling shareholders are executive officers and directors of our
subsidiary, or are entities controlled by the executive officers
and
directors of our subsidiary.
|
(7)
|
Indicates
shares subject to lock-up through July 28, 2006.
|
(8)
|
233,333
of these shares are subject to lock-up through July 28, 2006.
|
(9)
|
These
selling shareholders are our former executive officers and
directors.
|
(10)
|
These
selling shareholders are broker/dealers or affiliates of
broker/dealers.
|
(1)
|
Founder
shares
|
(2)
|
Shares
purchased in IsoRay Products LLC 10/15/03 PPM
|
(3)
|
Shares
purchased in IsoRay, Medical, Inc. 10/15/04
|
(4)
|
Shares
received for conversion of debenture investment in IsoRay Medical,
Inc.
01/31/05 PPM
|
(5)
|
Certain
Century Park Pictures Corp. shareholders who held shares for many
years
prior to merger with IsoRay Medical, Inc.
|
(6)
|
Equity
received in exchange for services rendered or goods provided to
IsoRay
companies
|
(7)
|
Shares
received through exercise of options or warrants
|
(
(
8)
|
Shares
purchased from founders in the summer of
2005
|
·
|
ordinary
brokers' transactions,
|
·
|
through
brokers, dealers, or underwriters who may act solely as agents,
|
·
|
"at
the market" into an existing market for the common stock,
|
·
|
in
other ways not involving market makers or established trading markets,
including direct sales to purchasers or sales effected through
agents,
|
·
|
in
privately negotiated transactions, and
|
·
|
any
combination of the foregoing.
|
·
|
1,000,000
shares of Series A are authorized and 5,000,000 shares of Series
B are
authorized. As of April 25, 2006 there were no shares of Series
A issued
and outstanding; there were 181,248 Series B preferred shares issued
and
outstanding. The Company has no plans to issue any Series A shares
for the
foreseeable future.
|
·
|
The
Series A shares are entitled to a 10% dividend annually on the
stated
value per share ($1.20) of the Series A, while the Series B shares
are
entitled to a cumulative 15% dividend annually on the stated value
per
share ($1.20) of the Series B. Such dividends will be declared
and paid at
the discretion of the Board to the extent funds are legally available
for
the payment of dividends.
|
·
|
Both
series of preferred shares vote equally with the common stock,
with each
share of preferred having the number of votes equal to the voting
power of
one share of common stock, except that the vote or written consent
of a
majority of the outstanding preferred shares is required for any
changes
to the Company’s Articles of Incorporation, Bylaws or Certificate of
Designation or for any bankruptcy, insolvency, dissolution or liquidation
of the company.
|
·
|
Shares
of either series of preferred stock may be converted at the option
of the
holder into shares of common stock at a rate of one share of common
stock
for each share of preferred stock being converted, subject to adjustment
for stock splits, stock combinations, reorganization, merger,
consolidation, reclassification, exchange or
substitution.
|
·
|
Both
series of preferred stock are subject to automatic conversion into
common
stock upon the closing of a firmly underwritten public offering
pursuant
to an effective registration statement under the Act, covering
the offer
and sale of common stock in which the gross proceeds to the Company
are at
least $4 million.
|
·
|
The
Board of Directors has approved the cancellation of the Series
A Preferred
Stock, given that there are no Series A shares issued, and this
cancellation will occur in the near future. The Board of Directors
has no
plans at this time to issue additional series of preferred stock.
|
Page | |||
Report
of Registered Independent Certified Public Accounting Firm
|
F-2
|
||
Financial
Statements
|
|||
|
|||
Balance
Sheets
as of June 30, 2005, September 30, 2004 and 2003
|
F-3
|
||
|
|||
Statements
of Operations and Comprehensive Income (Loss)
for the nine months
ended June 30, 2005 and for the years ended September 30, 2004
and 2003
|
F-4
|
||
|
|||
Statement
of Changes in Shareholders' Equity
for the nine months ended June
30, 2005 and for the years ended September 30, 2004 and 2003
|
F-5
|
||
|
|||
Statements
of Cash Flows
for the nine months ended June 30, 2005 and for the
years ended September 30, 2004 and 2003
|
F-6
|
||
Notes
to Financial Statements
|
F-7
|
||
Unaudited
Financial Statements
|
F-20
|
||
Consolidated
Balance Sheets
as of December 31, 2005
|
F-21
|
||
|
|||
Consolidated
Statements of Operations
for the six months ended December 31,
2005
|
F-22
|
||
Consolidated
Statements of Cash Flows
for the six months ended December 31,
2005
|
F-23
|
||
Notes
to Financial Statements
|
F-24
|
June
30,
2005
|
September
30,
2004
|
September
30,
2003
|
||||||||
Assets
|
||||||||||
Current
Assets
|
||||||||||
Cash
on
hand and in bank
|
$
|
32,587
|
$
|
-
|
$
|
-
|
||||
Total
current assets
|
32,587
|
-
|
-
|
|||||||
Other
Assets
|
-
|
926
|
926
|
|||||||
Rent
deposits
|
||||||||||
Total
Assets
|
$
|
32,587
|
$
|
926
|
$
|
926
|
||||
Current
Liabilities
|
||||||||||
Notes
payable
|
$
|
-
|
$
|
-
|
$
|
100,000
|
||||
Accounts
payable - trade
|
21,355
|
395
|
-
|
|||||||
Accrued
officer compensation
|
-
|
354,500
|
354,500
|
|||||||
Accrued
interest payable
|
-
|
-
|
73,714
|
|||||||
Other
accrued expenses
|
-
|
-
|
9,027
|
|||||||
Advances
from shareholder
|
-
|
37,744
|
27,887
|
|||||||
Total
current liabilities
|
21,355
|
392,639
|
565,128
|
|||||||
Shareholders'
Equity (Deficit)
|
||||||||||
Preferred
stock - $0.001 par value
|
||||||||||
6,000,000
shares authorized
|
||||||||||
1,000,000
shares allocated to Series A
|
-
|
-
|
-
|
|||||||
5,000,000
shares allocated to Series B
|
-
|
-
|
-
|
|||||||
Common
stock - $0.001 par value.
|
||||||||||
194,000,000
shares authorized.
|
||||||||||
2,498,319,
2,414,985 and 2,099,554 shares
issued
and outstanding, respectively
|
2,498
|
2,415
|
2,099
|
|||||||
Additional
paid-in capital
|
7,307,600
|
6,874,610
|
6,778,194
|
|||||||
Accumulated
deficit
|
(
7,298,866
|
)
|
(
7,268,738
|
)
|
(
7,344,495
|
)
|
||||
Total
shareholders' equity (deficit)
|
11,232
|
(391,713
|
)
|
(564,202
|
)
|
|||||
Total
Liabilities and
Shareholders'
Equity (Deficit)
|
$
|
32,587
|
$
|
926
|
$
|
926
|
Nine
months
ended
June
30,
2005
|
Year
ended
September
30,
2004
|
Year
ended
September
30,
2003
|
||||||||
Revenues
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
Expenses
|
||||||||||
General
and administrative expenses
|
30,128
|
9,095
|
19,022
|
|||||||
Statutory
cancellation of notes payable and accrued interest
|
-
|
(86,956
|
)
|
-
|
||||||
Total
expenses
|
30,128
|
(77,861
|
)
|
-
|
||||||
Income
(Loss) from operations
|
(30,128
|
)
|
(77,861
|
)
|
(19,022
|
)
|
||||
Other
Expense
|
||||||||||
Interest
expense
|
-
|
(2,104
|
)
|
(
41,005
|
)
|
|||||
Income
(Loss) before provision
for
income taxes and extraordinary item
|
(30,128
|
)
|
75,757
|
(60,027
|
)
|
|||||
Provision
for income taxes
|
-
|
-
|
-
|
|||||||
Net
Income (Loss)
|
(30,128
|
)
|
75,757
|
(60,027
|
)
|
|||||
Other
Comprehensive Income
|
-
|
-
|
-
|
|||||||
Comprehensive
Income (Loss)
|
$
|
(30,128
|
)
|
$
|
75,757
|
$
|
(60,027
|
)
|
||
Income
(Loss) per weighted-average
share
of common stock outstanding,
computed
on Net Loss - basic and fully
diluted
|
$
|
(
0.01
|
)
|
$
|
(
0.03
|
)
|
$
|
(
0.07
|
)
|
|
Weighted-average
number of shares
of
common stock outstanding
|
2,429,027
|
2,360,690
|
804,619
|
Common
Stock
|
||||||||||||||||
Shares
|
Amount
|
Additional
paid-in
capital
|
Accumulated
deficit
|
Total
|
||||||||||||
Balances
at October 1, 2002
|
9,886,641
|
$
|
9,887
|
$
|
6,191,566
|
$
|
(7,284,468
|
)
|
$
|
(1,083,015
|
)
|
|||||
Effect
of April 29, 2005
1-for-30
reverse stock split
|
(
9,557,317
|
)
|
(
9,558
|
)
|
9,558
|
-
|
-
|
|||||||||
Balances
at
October
1, 2002, as reset
|
329,324
|
329
|
6,201,124
|
(7,284,468
|
)
|
(1,083,015
|
)
|
|||||||||
Conversion
of notes payable
and
accrued interest payable
to
common stock
|
1,770,230
|
1,770
|
529,299
|
-
|
531,069
|
|||||||||||
Forgiveness
of accrued interest
|
-
|
-
|
6,766
|
-
|
6,766
|
|||||||||||
Contribution
of imputed interest
on
suspended interest on
notes
payable
|
-
|
-
|
41,005
|
-
|
41,005
|
|||||||||||
Net
loss for the year
|
-
|
-
|
-
|
(60,027
|
)
|
(60,027
|
)
|
|||||||||
Balances
at
September
30, 2003
|
2,099,554
|
2,099
|
6,778,194
|
(7,344,495
|
)
|
(564,202
|
)
|
|||||||||
Conversion
of notes payable
and
accrued interest payable
to
common stock
|
289,194
|
290
|
86,468
|
-
|
86,758
|
|||||||||||
Contribution
of imputed interest on
suspended
interest on notes
payable
|
-
|
-
|
2,104
|
-
|
2,104
|
|||||||||||
Common
stock issued for
debt
conversion services
|
26,237
|
26
|
7,844
|
-
|
7,870
|
|||||||||||
Net
income for the year
|
-
|
-
|
-
|
75,757
|
75,757
|
|||||||||||
Balances
at
September
30, 2004
|
2,414,985
|
2,415
|
6,874,610
|
(7,268,738
|
)
|
(391,713
|
)
|
|||||||||
Sale
of common stock
for
cash
|
83,334
|
83
|
84,917
|
-
|
85,000
|
|||||||||||
Contributed
capital
|
-
|
-
|
43,573
|
-
|
43,573
|
|||||||||||
Contribution
of forgiven
accrued
officer's compensation
|
-
|
-
|
304,500
|
-
|
304,500
|
|||||||||||
Net
income for the nine months
|
-
|
-
|
-
|
(30,128
|
)
|
(30,128
|
)
|
|||||||||
Balances
at
June
30, 2005
|
2,498,319
|
$
|
2,498
|
$
|
7,307,600
|
$
|
(
7,298,866
|
)
|
$
|
11,232
|
Nine
months
ended
June
30,
2005
|
Year
ended
September
30,
2004
|
Year
ended
September 30,
2003
|
||||||||
Cash
Flows from Operating Activities
|
||||||||||
Net
Income (Loss)
|
$
|
(30,128
|
)
|
$
|
75,757
|
$
|
(60,027
|
)
|
||
Adjustments
to reconcile net income to net cash
provided
by operating activities
|
||||||||||
Extinguishment
of notes payable and accrued interest
|
-
|
(86,956
|
)
|
-
|
||||||
Consulting
fees paid with common stock
|
-
|
7,870
|
-
|
|||||||
Contribution
of interest expense related to
suspended
interest payable on notes payable
|
-
|
2,104
|
41,005
|
|||||||
Increase
(Decrease) in
Accounts
payable and other accrued expenses
|
(
29,040
|
)
|
(8,632
|
)
|
-
|
|||||
Net
cash used in operating activities
|
(59,168
|
)
|
(9,857
|
)
|
(
19,022
|
)
|
||||
Cash
Flows from Investing Activities
|
-
|
-
|
-
|
|||||||
Cash
Flows from Financing Activities
|
||||||||||
Proceeds
from sale of common stock
|
85,000
|
-
|
-
|
|||||||
Funds
advanced by officer/shareholder
|
6,735
|
9,857
|
19,022
|
|||||||
Net
cash provided by financing activities
|
91,755
|
9,857
|
19,022
|
|||||||
Increase
(Decrease) in Cash and Cash Equivalents
|
32,587
|
-
|
-
|
|||||||
Cash
and cash equivalents at beginning of period
|
-
|
-
|
-
|
|||||||
Cash
and cash equivalents at end of period
|
$
|
32,587
|
$
|
-
|
$
|
-
|
||||
Supplemental
Disclosures of Interest and Income
Taxes
Paid
|
||||||||||
Interest
paid during the period
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
Income
taxes paid (refunded)
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
Supplemental
Disclosure of Non-cash Investing
and
Financing Activities
|
||||||||||
Conversion
of forgiven unpaid accrued officers
compensation
to accrued capital
|
$
|
304,500
|
$
|
-
|
$
|
-
|
Nine
months
ended
June 30,
2005
|
Year
ended
September
30,
2004
|
Year
ended September 30,
2003
|
||||||||
Federal:
|
||||||||||
Current
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
Deferred
|
-
|
-
|
-
|
|||||||
|
- |
-
|
-
|
|||||||
State:
|
||||||||||
Current
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
Deferred
|
-
|
-
|
-
|
|||||||
|
- |
-
|
-
|
|||||||
Total
|
$
|
-
|
$
|
-
|
$
|
-
|
Nine
months
ended
June 30,
2005
|
Year
ended
September
30,
2004
|
Year
ended September 30,
2003
|
||||||||
Statutory
rate applied to earnings (loss) before income taxes
|
$
|
10,200
|
$
|
25,750
|
$
|
(20,400
|
)
|
|||
Increase
(decrease) in income taxes resulting from:
|
||||||||||
State
income taxes
|
-
|
-
|
-
|
|||||||
Other,
including reserve for deferred tax asset
|
(
10,200
|
)
|
(
25,750
|
)
|
20,400
|
|||||
Income
tax expense
|
$
|
-
|
$
|
-
|
$
|
-
|
Nine
months ended June 30, 2005
|
||||||||||
Federal
|
State
|
Total
|
||||||||
Deferred
tax assets:
|
||||||||||
Other
(current)
|
$
|
96,000
|
$
|
35,000
|
$
|
131,000
|
||||
Net
operating loss carryforwards (non-current)
|
932,000
|
77,000
|
1,009,000
|
|||||||
1,028,000
|
112,000
|
1,140,000
|
||||||||
Valuation
allowance
|
(
1,028,000
|
)
|
(
112,000
|
)
|
(
1,140,000
|
)
|
||||
Net
Deferred tax asset
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
Deferred
tax liabilities
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
Year
ended September 30, 2004
|
||||||||||
Federal
|
State
|
Total
|
||||||||
Deferred
tax assets:
|
||||||||||
Other
(current)
|
$
|
96,000
|
$
|
35,000
|
$
|
131,000
|
||||
Net
operating loss carryforwards (non-current)
|
932,000
|
77,000
|
1,009,000
|
|||||||
1,028,000
|
112,000
|
1,140,000
|
||||||||
Valuation
allowance
|
(
1,028,000
|
)
|
(
112,000
|
)
|
(
1,140,000
|
)
|
||||
Net
Deferred tax asset
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
Deferred
tax liabilities
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
|
Year
ended September 30, 2003
|
|||||||||
Federal
|
State
|
Total
|
||||||||
Deferred
tax assets:
|
||||||||||
Other
(current)
|
$
|
96,000
|
$
|
35,000
|
$
|
131,000
|
||||
Net
operating loss carryforwards (non-current)
|
932,000
|
77,000
|
1,009,000
|
|||||||
1,028,000
|
112,000
|
1,140,000
|
||||||||
Valuation
allowance
|
(
1,028,000
|
)
|
(
112,000
|
)
|
(
1,140,000
|
)
|
||||
Net
Deferred tax asset
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
Deferred
tax liabilities
|
$
|
-
|
$
|
-
|
$
|
-
|
IsoRay, Inc. and Subsidiary | ||||||||||
Consolidated Balance Sheets | ||||||||||
|
(Unaudited)
|
|||||||||
|
December
31,
|
June
30,
|
||||||||
2005
|
2005
|
|||||||||
ASSETS | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 648,684 | $ | 32,587 | ||||||
Accounts receivable, net | 467,616 | - | ||||||||
Inventory | 156,019 | - | ||||||||
Prepaid expenses | 208,942 | |||||||||
Total current assets | 1,481,261 | 32,587 | ||||||||
Fixed assets, net of accumulated depreciation and amortization | 1,627,443 | - | ||||||||
Other assets, net of accumulated amortization | 754,305 | - | ||||||||
Total assets | $ | 3,863,009 | $ | 32,587 | ||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | $ | 425,048 | $ | 21,355 | ||||||
Accrued payroll and related taxes | 222,958 | - | ||||||||
Accrued interest payable | 83,390 | - | ||||||||
Notes payable, due within one year | 244,219 | - | ||||||||
Capital lease obligations, due within one year | 174,930 | - | ||||||||
Total current liabilities | 1,150,545 | 21,355 | ||||||||
Notes payable, due after one year | 531,194 | - | ||||||||
Capital lease obligations, due after one year | 295,874 | - | ||||||||
Convertible debentures payable, due after one year | 530,000 | - | ||||||||
Total liabilities | 2,507,613 | 21,355 | ||||||||
Shareholders' equity: | ||||||||||
Preferred stock, $.001 par value; 6,000,000 shares authorized: | ||||||||||
Series A: 1,000,000 shares allocated; no shares issued and outstanding | - | - | ||||||||
Series B: 5,000,000 shares allocated; 292,328 and no shares issued and outstanding | 292 | - | ||||||||
Common stock, $.001 par value; 194,000,000 shares authorized; 13,383,139 and | ||||||||||
2,498,319 shares issued and outstanding | 13,383 | 2,498 | ||||||||
Subscriptions receivable (Note 8) | (6,227,067 | ) | - | |||||||
Additional paid-in capital | 16,835,833 | 7,307,600 | ||||||||
Accumulated deficit | (9,267,045 | ) | (7,298,866 | ) | ||||||
Total shareholders' equity | 1,355,396 | 11,232 | ||||||||
Total liabilities and shareholders' equity | $ | 3,863,009 | $ | 32,587 |
IsoRay,
Inc and Subsidiary
|
|||||||||||||
Consolidated
Statements of Operations
|
|||||||||||||
Three
and Six Months Ended December 31, 2005 and 2004 (Unaudited)
|
|||||||||||||
For
the three months ended
|
For
the six months ended
|
||||||||||||
December
31,
|
December
31,
|
December
31,
|
December
31,
|
||||||||||
2005
|
2004
|
2005
|
2004
|
||||||||||
Product
sales
|
$
|
486,247
|
$
|
-
|
$
|
697,162
|
$
|
-
|
|||||
Cost
of product sales
|
916,274
|
-
|
1,636,440
|
-
|
|||||||||
Gross
profit (loss)
|
(430,027
|
)
|
-
|
(939,278
|
)
|
-
|
|||||||
Operating
expenses:
|
|||||||||||||
Research
and development
|
96,837
|
-
|
122,619
|
-
|
|||||||||
Sales
and marketing expenses
|
340,532
|
-
|
655,571
|
-
|
|||||||||
General
and administrative expenses
|
675,444
|
3,574
|
1,636,393
|
7,743
|
|||||||||
Total
operating expenses
|
1,112,813
|
3,574
|
2,414,583
|
7,743
|
|||||||||
Operating
loss
|
(1,542,840
|
)
|
(3,574
|
)
|
(3,353,861
|
)
|
(7,743
|
)
|
|||||
Non-operating
income (expense):
|
|||||||||||||
Interest
income
|
3,193
|
-
|
10,152
|
-
|
|||||||||
Financing
expense
|
(195,480
|
)
|
-
|
(351,108
|
)
|
-
|
|||||||
Debt
conversion expense (Note 7)
|
(244,097
|
)
|
-
|
(244,097
|
)
|
-
|
|||||||
Non-operating
income (expense), net
|
(436,384
|
)
|
-
|
(585,053
|
)
|
-
|
|||||||
Net
loss
|
$
|
(1,979,224
|
)
|
$
|
(3,574
|
)
|
$
|
(3,938,914
|
)
|
$
|
(7,743
|
)
|
|
Net
loss per weighted-average share of common stock
|
$
|
(0.17
|
)
|
$
|
(0.00
|
)
|
$
|
(0.36
|
)
|
$
|
(0.00
|
)
|
|
Basic
weighted average shares outstanding
|
11,852,047
|
2,415,214
|
10,844,913
|
2,415,214
|
IsoRay,
Inc. and Subsidiary
|
|||||||
Consolidated
Statements of Cash Flows
|
|||||||
Six
Months Ended December 31, 2005 and 2004 (Unaudited)
|
|||||||
For
the six months ended
|
|||||||
December
31,
|
December
31,
|
||||||
2005
|
2004
|
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|||||||
Net
loss
|
$
|
(3,938,914
|
)
|
$
|
(7,743
|
)
|
|
Adjustments
to reconcile net loss to net cash used by operating activities:
|
|||||||
Depreciation
and amortization of fixed assets
|
95,432
|
-
|
|||||
Amortization
of
deferred financing costs and other assets
|
103,546
|
-
|
|||||
Compensation
recorded in connection with issuance of common stock
|
330,000
|
-
|
|||||
Rent
expense paid by issuance of common stock
|
30,009
|
-
|
|||||
Repair
and maintenance expense paid by issuance of common stock
|
14,752
|
-
|
|||||
Debt
conversion expense (Note 7)
|
244,097
|
-
|
|||||
Changes
in operating assets and liabilities:
|
|||||||
Accounts
receivable, net
|
(417,647
|
)
|
-
|
||||
Inventory
|
(74,093
|
)
|
-
|
||||
Prepaid
expenses
|
62,350
|
-
|
|||||
Accounts
payable
|
(291,895
|
)
|
(75
|
)
|
|||
Accrued
payroll and related taxes
|
65,032
|
-
|
|||||
Accrued
interest payable
|
42,065
|
-
|
|||||
Other
accrued expenses
|
-
|
395
|
|||||
Net
cash used by operating activities
|
(3,735,266
|
)
|
(7,423
|
)
|
|||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|||||||
Purchases
of fixed assets
|
(347,357
|
)
|
-
|
||||
Additions
to other assets
|
(64,096
|
)
|
-
|
||||
Net
cash used by investing activities
|
(411,453
|
)
|
-
|
||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|||||||
Funds
advanced by officer/shareholder
|
-
|
7,423
|
|||||
Net
advances on line of credit
|
200,000
|
-
|
|||||
Proceeds
from issuance of notes payable
|
250,000
|
-
|
|||||
Proceeds
from sales of convertible debentures payable
|
550,000
|
-
|
|||||
Principal
payments on notes payable
|
(279,926
|
)
|
-
|
||||
Principal
payments on capital lease obligations
|
(66,329
|
)
|
-
|
||||
Proceeds
from cash sales of common stock, net of issuance costs
|
2,324,168
|
-
|
|||||
Proceeds
from cash sales of common stock, pursuant to exercise of warrants
|
59,565
|
-
|
|||||
Proceeds
from cash sales of common stock, pursuant to exercise of options
|
72,928
|
-
|
|||||
Payments
to common shareholders in lieu of issuing fractional shares
|
(734
|
)
|
-
|
||||
Net
cash provided by financing activities
|
3,109,672
|
7,423
|
|||||
Net
decrease in cash and cash equivalents
|
(1,037,047
|
)
|
-
|
||||
Cash
and cash equivalents, beginning of period
|
1,685,731
|
-
|
|||||
CASH
AND CASH EQUIVALENTS, END OF PERIOD
|
$
|
648,684
|
$
|
-
|
|||
Supplemental
disclosures of cash flow information:
|
|||||||
Cash
paid for interest
|
$
|
205,497
|
$
|
-
|
|||
Non-cash
investing and financing activities:
|
|||||||
Exchange
of convertible debentures payable for shares of common stock
|
$
|
3,607,875
|
|||||
Fixed
assets acquired by capital lease obligations
|
$
|
507,947
|
|||||
Prepaid
rent paid by issuance of common stock
|
$
|
90,026
|
|||||
For
the three months ended
|
For
the six months ended
|
||||||||||||
December
31,
2005 |
December
31,
2004 |
December
31,
2005 |
December
31,
2004 |
||||||||||
Net
loss, as reported
|
$
|
(1,979,224
|
)
|
$
|
(3,574
|
)
|
$
|
(3,938,914
|
)
|
$
|
(7,743
|
)
|
|
Less:
Stock-based compensation expense determined under
|
|||||||||||||
fair
value method for all stock options, net of related tax
benefit
|
$
|
(3,254
|
)
|
$
|
-
|
(159,254
|
)
|
$
|
-
|
||||
Profoma
net loss
|
$
|
(1,982,478
|
)
|
$
|
(3,574
|
)
|
$
|
(4,098,168
|
)
|
$
|
(7,743
|
)
|
|
Basic
net loss per common share:
|
|||||||||||||
As
reported
|
$
|
(0.17
|
)
|
$
|
(0.00
|
)
|
$
|
(0.36
|
)
|
$
|
(0.00
|
)
|
|
Proforma
|
$
|
(0.17
|
)
|
$
|
(0.00
|
)
|
$
|
(0.38
|
)
|
$
|
(0.00
|
)
|
|
Diluted
net loss per common share:
|
|||||||||||||
As
reported
|
$
|
(0.17
|
)
|
$
|
(0.00
|
)
|
$
|
(0.36
|
)
|
$
|
(0.00
|
)
|
|
Proforma
|
$
|
(0.17
|
)
|
$
|
(0.00
|
)
|
$
|
(0.38
|
)
|
$
|
(0.00
|
)
|
Page | ||
Report
of Independent Auditor
|
F-30
|
|
Financial
Statements
|
||
|
||
Combined
Balance Sheets
as of June 30, 2005 and 2004
|
F-31
|
|
|
||
Combined
Statements of Operations
for the years ended June 30, 2005 and
2004
|
F-32
|
|
|
|
|
Combined
Statement of Changes in Shareholders' Equity (Deficit)
for the
years ended June 30, 2005 and 2004
|
F-33
|
|
|
|
|
Combined
Statements of Cash Flows
for the years ended June 30, 2005 and
2004
|
F-34
|
|
Notes
to Combined Financial Statements
|
F-35
|
IsoRay
Medical, Inc.
Combined
Balance Sheets
June
30, 2005 and 2004
|
|||||||
2005
|
2004
|
||||||
ASSETS
|
|||||||
Current
assets:
|
|||||||
Cash
and cash equivalents (Note 2)
|
$
|
1,653,144
|
$
|
470,439
|
|||
Accounts
receivable, net of allowance for doubtful
accounts of $17,075
|
49,969
|
-
|
|||||
Inventory
(Note 5)
|
81,926
|
19,726
|
|||||
Prepaid
expenses (Note 6)
|
181,266
|
77,133
|
|||||
Total
current assets
|
1,966,305
|
567,298
|
|||||
Fixed
assets, net of accumulated depreciation and amortization (Note 7)
|
842,323
|
297,181
|
|||||
Other
assets, net of accumulated amortization (Note 8)
|
793,756
|
96,295
|
|||||
Total
assets
|
$
|
3,602,384
|
$
|
960,774
|
|||
LIABILITIES
AND SHAREHOLDERS' EQUITY (DEFICIT)
|
|||||||
Current
liabilities:
|
|||||||
Accounts
payable
|
$
|
695,588
|
$
|
129,021
|
|||
Accrued
payroll and related taxes
|
157,924
|
58,010
|
|||||
Accrued
interest payable
|
41,325
|
8,235
|
|||||
Other
current liabilities (Note 4)
|
-
|
91,765
|
|||||
Notes
payable, due within one year (Note 10)
|
43,116
|
10,000
|
|||||
Capital
lease obligations, due within one year (Note 11)
|
9,604
|
-
|
|||||
Total
current liabilities
|
947,557
|
297,031
|
|||||
Notes
payable, due after one year (Note 10)
|
562,224
|
350,000
|
|||||
Capital
lease obligations, due after one year (Note 11)
|
19,584
|
-
|
|||||
Convertible
debentures payable, due after one year (Note 12)
|
3,587,875
|
-
|
|||||
Total
liabilities
|
5,117,240
|
647,031
|
|||||
Commitments
and contingencies (Notes 16 and 17)
|
|||||||
Shareholders'
equity (deficit) (Notes 1, 4 and 13):
|
|||||||
Preferred
stock, $.001 par value, 10,000,000 shares authorized:
|
|||||||
Series
A: No shares issued and outstanding
|
-
|
-
|
|||||
Series
B: 1,588,589 and no shares issued and outstanding
|
1,589
|
-
|
|||||
IsoRay
Medical, Inc. common stock, $.001 par value; 100,000,000 shares
authorized; 7,317,073 and 10,000 shares issued and outstanding
|
7,317
|
10
|
|||||
IsoRay,
Inc. common stock , $.001 par value; 20,000,000 shares authorized;
no shares and 2,767,700 shares issued and outstanding
|
-
|
2,768
|
|||||
Additional
paid-in capital
|
3,804,369
|
1,369,908
|
|||||
Accumulated
deficit
|
(5,328,131
|
)
|
(1,058,943
|
)
|
|||
Total
shareholders' equity (deficit)
|
(1,514,856
|
)
|
313,743
|
||||
Total
liabilities and shareholders' equity (deficit)
|
$
|
3,602,384
|
$
|
960,774
|
|||
IsoRay
Medical, Inc.
Combined
Statements of Operations
Years
Ended June 30, 2005 and 2004
|
|||||||
2005
|
2004
|
||||||
Product
sales
|
$
|
201,731
|
$
|
-
|
|||
Cost
of product sales (Note 5)
|
1,474,251
|
-
|
|||||
Gross
profit (loss)
|
(1,272,520
|
)
|
-
|
||||
Operating
expenses:
|
|||||||
Research
and development
|
137,532
|
42,326
|
|||||
Sales
and marketing expenses
|
701,822
|
81,486
|
|||||
General
and administrative expenses
|
1,871,325
|
650,161
|
|||||
Total
operating expenses
|
2,710,679
|
773,973
|
|||||
Operating
loss
|
(3,983,199
|
)
|
(773,973
|
)
|
|||
Non-operating
income (expense):
|
|||||||
Interest
income
|
2,394
|
1,898
|
|||||
Financing
expense (Note 8)
|
(167,493
|
)
|
(23,470
|
)
|
|||
Loss
on disposal of fixed assets
|
(120,890
|
)
|
-
|
||||
Non-operating
income (expense), net
|
(285,989
|
)
|
(21,572
|
)
|
|||
Net
loss
|
$
|
(4,269,188
|
)
|
$
|
(795,545
|
)
|
|
Net
loss per share of common stock
|
$
|
(0.66
|
)
|
$
|
(0.15
|
)
|
|
Basic
weighted average shares outstanding (Note 2)
|
6,493,700
|
5,174,346
|
IsoRay
Medical, Inc.
Combined
Statement of Changes in Shareholders' Equity
(Deficit)
Years
Ended June 30, 2005 and 2004
|
||||||||||||||||||||||||||||
IsoRay,
Inc.
|
IsoRay
Medical, Inc.
|
Additional
|
||||||||||||||||||||||||||
Common
Stock
|
Series
B Preferred Stock
|
Common
Stock
|
Paid-in
|
Accumulated
|
||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Total
|
||||||||||||||||||||
Balances
at June 30, 2003
|
2,607,700
|
$
|
2,608
|
-
|
$
|
-
|
-
|
$
|
-
|
$
|
181,642
|
$
|
(263,398
|
)
|
$
|
(79,148
|
)
|
|||||||||||
Issuance
of IsoRay, Inc. common shares as payment
for
prototype laser welding station (Note 13)
|
80,000
|
80
|
79,920
|
80,000
|
||||||||||||||||||||||||
Issuance
of IsoRay, Inc. common shares for cash
|
80,000
|
80
|
79,920
|
80,000
|
||||||||||||||||||||||||
Issuance
of IsoRay Products LLC member shares
for
cash, net of offering costs (Note 4)
|
1,060,201
|
1,060,201
|
||||||||||||||||||||||||||
Accrual
of dividends payable to IsoRay Products LLC
members
(Note 4)
|
(91,765
|
)
|
(91,765
|
)
|
||||||||||||||||||||||||
Issuance
of IsoRay Products LLC member shares and
IsoRay
Medical, Inc. common shares to related
party
for cash and compensation (Note 15)
|
10,000
|
10
|
59,990
|
60,000
|
||||||||||||||||||||||||
Net
loss for the year ended June 30, 2004
|
(795,545
|
)
|
(795,545
|
)
|
||||||||||||||||||||||||
Balances
at June 30, 2004
|
2,767,700
|
2,768
|
-
|
-
|
10,000
|
10
|
1,369,908
|
(1,058,943
|
)
|
313,743
|
||||||||||||||||||
Issuance
of IsoRay, Inc. common shares pursuant to
exercise
of
options (Note 13)
|
71,580
|
71
|
71,509
|
71,580
|
||||||||||||||||||||||||
Issuance
of IsoRay, Inc. common shares as
compensation
(Note 13)
|
57,025
|
57
|
56,968
|
57,025
|
||||||||||||||||||||||||
Issuance
of IsoRay Products LLC member shares for
cash,
net of offering costs (Note 4)
|
303,743
|
303,743
|
||||||||||||||||||||||||||
Merger
transaction (Note 1)
|
(2,896,305
|
)
|
(2,896
|
)
|
1,483,723
|
1,484
|
6,167,426
|
6,167
|
(4,755
|
)
|
-
|
|||||||||||||||||
Reversal
of dividends accrued by IsoRay
Products
LLC
(Note 4)
|
91,765
|
91,765
|
||||||||||||||||||||||||||
Issuance
of IsoRay Medical, Inc. common shares for
cash
pursuant to private placement, net of offering
costs
(Note 4)
|
765,500
|
766
|
1,355,812
|
1,356,578
|
||||||||||||||||||||||||
Issuance
of IsoRay Medical, Inc. common shares
pursuant
to
exercise of warrants granted in
connection
with
private placement
(Note
13)
|
129,750
|
130
|
64,745
|
64,875
|
||||||||||||||||||||||||
Issuance
of IsoRay Medical, Inc. common shares as
inducement
for
guarantee of debt (Note 13)
|
211,140
|
211
|
348,170
|
348,381
|
||||||||||||||||||||||||
Issuance
of IsoRay Medical, Inc. common shares as
partial
payment for laser welding stations (Note 13)
|
30,303
|
30
|
49,970
|
50,000
|
||||||||||||||||||||||||
Issuance
of Series B preferred shares pursuant
to
exercise of warrants (Note 13)
|
107,820
|
108
|
96,634
|
96,742
|
||||||||||||||||||||||||
Exchange
of Series B preferred shares for IsoRay
Medical,
Inc.
common shares
|
(2,954
|
)
|
(3
|
)
|
2,954
|
3
|
-
|
|||||||||||||||||||||
Payments
to common shareholders in lieu of issuing
fractional
shares (Note 13)
|
(100
|
)
|
(100
|
)
|
||||||||||||||||||||||||
Net
loss for the year ended June 30, 2005
|
(4,269,188
|
)
|
(4,269,188
|
)
|
||||||||||||||||||||||||
Balances
at June 30, 2005
|
-
|
$
|
-
|
1,588,589
|
$
|
1,589
|
7,317,073
|
$
|
7,317
|
$
|
3,804,369
|
$
|
(5,328,131
|
)
|
$
|
(1,514,856
|
)
|
IsoRay
Medical, Inc.
Combined
Statements of Cash Flows
Years
Ended June 30, 2005 and 2004
|
|||||||
2005
|
2004
|
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|||||||
Net
loss
|
$
|
(4,269,188
|
)
|
$
|
(795,545
|
)
|
|
Adjustments
to reconcile net loss to net cash used by operating
activities:
|
|||||||
Depreciation
and amortization of fixed assets
|
140,099
|
23,233
|
|||||
Amortization
of
deferred financing costs and other assets
|
82,358
|
5,200
|
|||||
Loss
on
disposal of fixed assets
|
120,890
|
-
|
|||||
Compensation
recorded in connection with issuance of common stock
|
57,025
|
59,900
|
|||||
Changes
in operating assets and liabilities:
|
|||||||
Accounts
receivable, net
|
(49,969
|
)
|
-
|
||||
Inventory
|
(62,200
|
)
|
(19,726
|
)
|
|||
Prepaid
expenses
|
(104,133
|
)
|
(72,439
|
)
|
|||
Accounts
payable
|
566,567
|
114,958
|
|||||
Accrued
payroll and related taxes
|
99,914
|
58,010
|
|||||
Accrued
interest payable
|
33,090
|
107
|
|||||
Net
cash used by operating activities
|
(3,385,547
|
)
|
(626,302
|
)
|
|||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|||||||
Purchases
of fixed assets
|
(724,029
|
)
|
(167,875
|
)
|
|||
Additions
to other assets
|
(431,438
|
)
|
(70,117
|
)
|
|||
Net
cash used by investing activities
|
(1,155,467
|
)
|
(237,992
|
)
|
|||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|||||||
Borrowings
under notes payable
|
315,000
|
330,000
|
|||||
Proceeds
from sales of convertible debentures payable
|
3,587,875
|
-
|
|||||
Principal
payments on notes payable
|
(23,653
|
)
|
(139,803
|
)
|
|||
Principal
payments on capital lease obligations
|
(2,914
|
)
|
-
|
||||
Issuance
of common shares and LLC member shares for cash, net of
offering
costs
|
1,847,511
|
1,140,301
|
|||||
Payments
to common and Series B preferred shareholders in lieu of
issuing
fractional shares
|
(100
|
)
|
-
|
||||
Net
cash provided by financing activities
|
5,723,719
|
1,330,498
|
|||||
Net
increase in cash and cash equivalents
|
1,182,705
|
466,204
|
|||||
Cash
and cash equivalents, beginning of period
|
470,439
|
4,235
|
|||||
CASH
AND CASH EQUIVALENTS, END OF PERIOD
|
$
|
1,653,144
|
$
|
470,439
|
|||
Supplemental
disclosures of cash flow information:
|
|||||||
Cash
paid for interest
|
$
|
57,657
|
$
|
23,577
|
|||
Non-cash
investing and financing activities:
|
|||||||
Fixed
assets acquired by capital lease obligations
|
$
|
32,102
|
$
|
-
|
|||
Issuance
of
IsoRay Medical, Inc. preferred shares for debt reduction
|
$
|
46,007
|
|||||
Issuance
of
common shares as compensation for guarantee of debt
|
$
|
348,381
|
|||||
Accrual
(reversal) of dividends payable to IsoRay Products LLC members
|
$
|
(91,765
|
)
|
$
|
91,765
|
||
Issuance
of
common shares for laser welding stations purchases
|
$
|
50,000
|
$
|
80,000
|
2005
|
2004
|
||||||
Raw
materials
|
$
|
27,659
|
$
|
19,726
|
|||
Work
in process
|
54,267
|
—
|
|||||
$
|
81,926
|
$
|
19,726
|
2005
|
2004
|
||||||
Prepaid
contract work
|
$
|
65,328
|
$
|
69,063
|
|||
Prepaid
insurance
|
15,853
|
5,350
|
|||||
Other
prepaid expenses
|
100,085
|
2,720
|
|||||
$
|
181,266
|
$
|
77,133
|
2005
|
2004
|
||||||
Production
equipment
|
$
|
399,448
|
$
|
290,864
|
|||
Office
equipment
|
65,077
|
17,339
|
|||||
Furniture
and fixtures
|
7,736
|
7,736
|
|||||
Leasehold
improvements
|
138,692
|
38,368
|
|||||
610,953
|
354,307
|
||||||
Less
accumulated depreciation and amortization
|
(134,664
|
)
|
(57,126
|
)
|
|||
476,289
|
297,181
|
||||||
Construction
in progress (Note 16)
|
366,034
|
--
|
|||||
$
|
842,323
|
$
|
297,181
|
2005
|
2004
|
||||||
Deferred
financing costs, net of accumulated
amortization
of $76,746
|
$
|
548,837
|
$
|
--
|
|||
Deferred
charges
|
204,649
|
84,683
|
|||||
Patents
and trademarks, net of accumulated
amortization
of $12,318 and $9,380
|
21,614
|
9,425
|
|||||
Licenses,
net of accumulated amortization of
$2,674
and $-0-
|
18,656
|
2,187
|
|||||
$
|
793,756
|
$
|
96,295
|
Year
ending June 30,
|
||||
2006
|
$
|
13,524
|
||
2007
|
13,238
|
|||
2008
|
9,819
|
|||
Total
future minimum lease payments
|
36,581
|
|||
Less
amount due within one year
|
(7,393
|
)
|
||
Present
value of net minimum lease payments
|
29,188
|
|||
Less
amount due within one year
|
(9,604
|
)
|
||
Amount
due after one year
|
$
|
19,584
|
Number
of
Shares
|
Exercise
Price
|
Expiration
Date
|
|||||
7,385
|
$
|
.59
|
July
1, 2005
|
||||
67,520
|
$
|
.59
|
October
30, 2006
|
||||
33,760
|
$
|
.59
|
January
31, 2007
|
||||
7,385
|
$
|
.59
|
February
28, 2007
|
||||
67,520
|
$
|
.59
|
March
30, 2007
|
||||
90,096
|
$
|
.89
|
July
1, 2005
|
||||
90,096
|
$
|
.89
|
February
28, 2007
|
||||
10,339
|
$
|
1.18
|
July
1, 2005
|
||||
10,339
|
$
|
1.18
|
February
28, 2007
|
||||
384,440
|
$
|
.59
to $1.18
|
Number
of
Shares
|
Exercise
Price
|
|
|
Expiration
Date
|
|||
7,385
|
$
|
.59
|
July
1, 2005
|
||||
90,096
|
$
|
.89
|
July
1, 2005
|
||||
10,339
|
$
|
1.18
|
July
1, 2005
|
||||
107,820
|
$
|
.59
to $1.18
|
Number
of
Shares
|
Exercise
Price
|
Expiration
Date
|
|||||
67,520
|
$
|
.59
|
October
30, 2006
|
||||
33,760
|
$
|
.59
|
January
31, 2007
|
||||
7,385
|
$
|
.59
|
February
28, 2007
|
||||
67,520
|
$
|
.59
|
March
30, 2007
|
||||
90,096
|
$
|
.89
|
February
28, 2007
|
||||
10,339
|
$
|
1.18
|
February
28, 2007
|
||||
276,620
|
$
|
.59
to $1.18
|
Net
loss as reported for the year ended June 30, 2005$
|
$
|
4,375,904
|
||
SFAS
No. 123 stock option expense
|
771,365
|
|||
Pro
forma net loss for the year ended June 30, 2005
|
$
|
5,147,269
|
||
Risk-free
interest rate
|
3.50
|
%
|
||
Expected
dividend yield
|
0.00
|
%
|
||
Year
ending June
30,
|
||||
2006
|
$
|
5,400
|
||
2007
|
5,400
|
|||
2008
|
5,400
|
|||
2009
|
5,400
|
|||
2010
|
2,700
|
Item 24.
|
Indemnification
of Directors and Officers
|
Item 25.
|
Other
Expenses of Issuance and Distribution
|
Securities
and Exchange Commission registration fee
|
$
|
4,423
|
||
Transfer
agent fees
|
$
|
2,000
|
||
Accounting
fees and expenses
|
$
|
5,000
|
||
Legal
fees and expenses
|
$
|
75,000
|
||
Blue
sky fees and expenses
|
$
|
10,000
|
||
|
||||
Total
|
$
|
96,423
|
Item 26.
|
Recent
Sales of Unregistered Securities
|
·
|
In
February 2006, the Registrant sold 268,899 shares of common stock,
and
issued an equal number of warrants to purchase common stock, for
cash
proceeds of $1,210,000. These sales were effected pursuant to the
exemption from registration provided by Regulation D promulgated
under the
Securities Act of 1933, as amended (the “Securities Act”), and Section
4(2) of the Securities Act. In connection with this sale, 17,389
warrants
were issued as compensation to certain NASD registered broker-dealers.
|
·
|
Between
October 17, 2005 and January 31, 2006, the Registrant sold 1,500,000
shares of common stock, and issued an equal number of warrants
to purchase
common stock, for cash proceeds of $6,000,000 (less commissions
of ten
percent (10%) on securities placed by broker/dealers). This common
stock
was sold as part of a unit offering including one share of common
stock
and a callable warrant to purchase one share of common stock at
$6.00 per
share with a two-year term. These sales were effected pursuant
to the
exemption from registration provided by Regulation D promulgated
under the
Securities Act, and Section 4(2) of the Securities Act. In connection
with
this sale, 92,159 warrants were issued as compensation to certain
NASD
registered broker-dealers.
|
·
|
On
December 7, 2005, the Registrant entered into a SICAV ONE Securities
Purchase Agreement and a SICAV TWO Securities Purchase Agreement
(collectively, the “Purchase Agreements”) with Mercatus & Partners,
Limited, a United Kingdom private limited Registrant (“Mercatus”).
Pursuant to the Purchase Agreements, Mercatus has agreed, subject
to
receipt of sufficient funding, to purchase 1,778,146 shares of
the
Registrant’s common stock at a purchase price of $3.502 per share. As of
April 21, 2006, no funding had been received by the Registrant
and the
Company intends to request the return of the shares shortly. Pursuant
to
the Purchase Agreements, Mercatus, a foreign entity, was issued
1,778,146
shares of the Registrant’s common stock in exchange for a future cash
payment of $6,227,067.29. If the future payment is not made then
the
shares will be returned. This sale was effected pursuant to Section
4(2)
of the Securities Act.
|
·
|
On
November 18, 2005, the Registrant issued 10,000 shares of common
stock to
Intellegration LLC
in
exchange for $40,000 of capital production equipment, consulting
services,
and repair and maintenance services on production equipment used
in the
PIRL facilities pursuant to the exemption from registration provided
by
Section 4(2) of the Securities Act.
|
·
|
On
October 6, 2005, the Registrant issued 24,007 shares of common
stock to
Nuvotec USA, Inc. as payment for one year’s lease of the PIRL facilities
pursuant to the exemption from registration provided by Section
4(2) of
the Securities Act.
|
·
|
In
April 2005, the Registrant sold an aggregate of 2,500,000 shares
(prior to
the Registrant's April 29, 2005 30:1 reverse stock split) for cash
proceeds of $85,000. These shares were sold to three purchasers
- Andrew
Ecclestone (1,470,000 shares), Gary Boster (882,000 shares) and
Philip and
Stephanie Rogers (148,000 shares) - in reliance on the exemption
from
registration provided by Section 4(2) of the Securities Act.
|
·
|
On
December 3, 2003, the Registrant issued 787,100 pre-30:1 reverse
stock
split shares of restricted stock to Thomas Scallen, its former
CEO, as
compensation valued at $7,871, in reliance on the exemption from
registration provided by Section 4(2) of the Securities
Act.
|
·
|
On
December 3, 2003, the Registrant issued 8,675,800 pre-30:1 reverse
stock
split shares of restricted stock to Mark Rosenberg in redemption
of two
notes payable of approximately $36,758, pursuant to the conversion
terms
of the two notes and in reliance on the exemption from registration
provided by Section 4(2) of the Securities Act.
|
·
|
On
June 23, 2003, the Registrant issued an aggregate 53,783,500 pre-30:1
reverse stock split shares of restricted common stock in redemption
of
various outstanding notes payable in the face amount of approximately
$300,000 and accrued interest payable of approximately $237,835,
pursuant
to the conversion terms of the respective notes and in reliance
on the
exemption from registration provided by Section 4(2) of the Securities
Act.
|
·
|
Between
January 31, 2005 and July 10, 2005, IsoRay Medical, Inc. sold
approximately $4,000,000 in principal amount of 8% convertible
debentures
(less commissions of ten percent (10%) on securities placed by
broker/dealers), in reliance on the exemption from registration
provided
by Rule 506 of Regulation D of the Securities Act, that subsequent
to the
merger between the Registrant and IsoRay Medical, Inc. were convertible
into 995,882 shares of common stock of the Registrant. On December
13,
2005, the Board of Directors of the Registrant announced a short-term
conversion inducement to current holders of these convertible
debentures.
Holders were permitted two conversion options: 1) convert under
the
original terms of the debenture to the Company’s common stock at a $4.15
conversion price, and include the newly issued shares in this
registration
statement, or 2) convert under terms essentially identical to
those
offered to purchasers of Units in the Registrant’s offering of October 17,
2005: a $4.00 conversion price and one callable warrant to purchase
one
share of the Company's common stock at an exercise price of $6.00
per
share for each share issued upon conversion (waiving registration
rights
for approximately one year). As of February 10, 2006, holders
of
$3,682,875 of debentures had converted to common stock of the
Registrant.
As of that date, the Registrant had issued 911,276 shares of
common stock,
and 659,469 warrants to purchase shares of common stock, exercisable
at
$6.00 per share, leaving $455,000 in principal amount of debentures
unconverted. Of the 911,276 shares of common stock issued pursuant
to
conversion of the debentures, 251,807 shares are included in
this
registration.
|
·
|
On
March 31, 2005, IsoRay Medical, Inc. issued, in reliance on the
exemption
from registration provided by Section 4(2) of the Securities
Act, 30,303
shares of its common stock and paid $40,000 of cash to Intellegration
LLC
in full satisfaction of the $90,000 purchase price of three laser
welding
stations. Pursuant to the merger with the Registrant, these 30,303
shares
were converted into 25,526 shares of the Registrant’s common stock, of
which all 25,526 are included in this registration.
|
·
|
In
January, 2005, IsoRay Medical, Inc. issued, in reliance on the
exemption
from registration provided by Section 4(2) of the Securities
Act, 211,140
shares of its common stock under §83(b) (subject to a substantial risk of
forfeiture) to certain shareholders as an inducement for their
guarantee
of the Columbia River Bank line of credit and the note payable
to
Benton-Franklin Economic Development District. The transactions
were
recorded at the fair value of the shares, estimated to be $348,381.
Pursuant to the merger with the Registrant, these 211,140 shares
were
converted into 177,856 shares of the Registrant’s common stock, of which
none are included in this registration.
|
·
|
Between
October 15, 2004 and January 21, 2005, IsoRay Medical, Inc. sold
765,500
shares of common stock and issued 229,650 warrants to purchase
shares of
common stock for $.50 per share, for a total of $1,531,000 to
accredited
individual investors, (less commissions of ten percent (10%)
on securities
placed by broker/dealers), in reliance on Rule 506 of Regulation
D of the
Securities Act. All 229,650 warrants were subsequently exercised
prior to
the completion of the merger on July 28, 2005. Pursuant to the
merger, all
995,150 shares of IsoRay Medical, Inc. were converted into 838,277
shares
of the Registrant. Of these shares, 20%, or approximately 167,655
shares,
are included in this registration.
|
·
|
In
connection with the October 15, 2004 private placement, IsoRay
Medical,
Inc. granted, in reliance on the exemption from registration
provided by
Section 4(2) of the Securities Act, the selling broker-dealers
warrants to
purchase 4.23 units at $20,000 per unit. These units represented
42,300
shares of IsoRay Medical, Inc. common stock to purchase 12,690
common
shares at $.50 per share. These units were converted into 35,631
shares of
the Registrant’s common stock and warrants to purchase 10,689 shares of
the Registrant’s common stock at $.59 per share. All 35,631 shares of
common stock are included in this registration.
|
·
|
In
June 2004, IsoRay Medical, Inc. issued 10,000 of its common shares
to Mr.
Girard primarily for services rendered and for $100 cash pursuant
to
Section 4(2) of the Securities Act. The Company recorded $9,900
of
compensation expense in connection with the issuance of these
shares.
During the merger with the Registrant, these 10,000 shares were
converted
into 8,423 shares of the Registrant’s common stock, of which 1,684 are
included in this
registration.
|
·
|
Between
October 15, 2003, and September 30, 2004, in reliance on the
exemption
from registration provided by Section 4(2) of the Securities
Act and Rule
506 of Regulation D of the Securities Act, in a three-phase private
equity
offering prior to the October 1, 2004 business combination of
IsoRay,
Inc., IsoRay Products LLC, and IsoRay Medical, Inc., IsoRay Products
LLC
sold 879,014 Class A shares, 241,500 Class C shares, and issued
127,750
warrants to debt unit investors, to purchase Class A or Class
C shares at
exercise prices ranging from $1.00 to $2.00 for a total of $1,541,417,
less offering costs.
|
Class
A Shares.
The Class A shareholders were entitled to a 15% annual, cumulative
dividend payable quarterly. In connection with the business combination,
the 879,014 IsoRay Products LLC Class A shares were converted
into
1,483,723 IsoRay Medical, Inc. Series B preferred shares. Subsequent
to
the merger with the Registrant, these 1,483,723 IsoRay Medical,
Inc.
Series B preferred shares were converted into approximately 1,249,831
shares of the Registrant’s Series B preferred stock. Subsequent to the
merger with the Registrant, most Series B preferred shareholders
converted
their preferred stock into common stock, and as of February 10,
2006, of
the initial 1,249,831 shares of the Registrant’s Series B preferred stock
issued, only 223,903 shares of Series B preferred stock remain
issued and
outstanding; the balance of 1,025,928 having been exchanged for
shares of
the Registrant’s common stock. Approximately 43,219 shares of common stock
to be received upon conversion of the preferred stock are included
in this
registration.
|
|
Class
B and Class C Shares.
The IsoRay Products LLC Class B and Class C shareholders were
not entitled
to a dividend as were the IsoRay Products LLC Class A shareholders.
In
connection with the business combination, the 2,996,305 IsoRay
Products
LLC Class B, and 241,500 IsoRay Products LLC Class C shares were
converted
into 6,167,426 replacement IsoRay Medical, Inc. common shares.
Subsequent
to the merger with the Registrant, these 6,167,426 IsoRay Medical,
Inc.
common shares were converted into approximately 5,195,205 shares
of the
Registrant’s common stock. Approximately 1,039,041 of these shares are
included in this registration.
|
·
|
Each
debt unit consisted of a $5,000 secured note payable and two warrants.
The
notes payable were secured by the Company's patents, patents pending
and
current patent applications, accrued interest at 10%, payable quarterly,
and matured three years from their issue date. Each warrant entitled
the
holder to purchase 875 IsoRay Products LLC Class A shares. One
of the
warrants was exercisable through July 1, 2005, and the second warrant
is
exercisable through February 28, 2007. The warrant exercise prices
ranged
from $1.00 to $2.00 per share, depending on the IsoRay Products
LLC Class
A share price at the time of the debt unit sale.
|
·
|
In
connection with the business combination between IsoRay Medical,
Inc.,
IsoRay, Inc. and IsoRay Products LLC, the note holders were issued
IsoRay
Medical, Inc. notes payable with substantially the same terms and
conditions as their IsoRay Products LLC notes, and the IsoRay Products
LLC
warrants were exchanged for warrants to purchase 215,640 IsoRay
Medical,
Inc. Series B Preferred shares. Subsequent to the merger with the
Registrant, these warrants to purchase 215,640 IsoRay Medical,
Inc. Series
B Preferred shares were exchanged for approximately 181,647 warrants
to
purchase Series B Preferred shares of the Registrant. As of March
5, 2006,
only 34,836 of the 181,647 warrants remained unexercised, of which
6,967
underlying shares are included in this registration. The entire
$365,000
outstanding secured notes payable, received in the IsoRay Products
LLC
private placement, have now been repaid.
|
·
|
In
connection with the private placement of October 15, 2003, IsoRay
Products
LLC granted warrants for the purchase of 100,000 of its Class A
member
shares to Pinnacle International Holdings, LLC, a financial services
company, pursuant to Section 4(2) of the Securities Act. These
warrants
were exercisable at $1.00 per share. Subsequent to the business
combination of the IsoRay companies, these warrants were exchanged
for
168,799 warrants to purchase IsoRay Medical, Inc. shares of Series
B
Preferred stock at $.59 per share. Pursuant to the merger with
the
registrant, these 168,799 warrants were exchanged for warrants
to purchase
142,190 shares of the Registrant’s common stock at $.70 per share. Of
these 142,190 warrants, 24,438 of the underlying shares of common
stock
are included in this registration.
|
·
|
In
September 2003, Roger Girard, President of IsoRay, Inc., was issued
100,000 IsoRay Products LLC Class B shares primarily for services
rendered
and in reliance on the exemption from registration provided by
Section
4(2) of the Securities Act. IsoRay Products LLC recorded $50,000
of
compensation expense in connection with the issuance of these shares.
Subsequent to the business combination among IsoRay companies,
these
shares were exchanged for 168,798 shares of IsoRay Medical, Inc.,
which
were subsequently exchanged in connection with the merger with
the
Registrant for 142,189 shares of the Registrant’s common stock, of which
28,437 are included in this registration statement.
|
·
|
During
March 2004, IsoRay, Inc. issued 80,000 shares of its common stock
in full
satisfaction of the $80,000 purchase price of a prototype laser
welding
station and in reliance on the exemption from registration provided
by
Section 4(2) of the Securities Act. Subsequent to the business
combination
among IsoRay companies, these 80,000 shares were exchanged for
154,431
shares of IsoRay Medical, Inc. common stock, which were subsequently
exchanged for 130,087 shares of common stock of the Registrant
pursuant to
the Merger. Of those 130,087 shares of common stock, 26,017 are
included
in this registration.
|
·
|
As
of December 2003 IsoRay, Inc. sold 80,000 shares of its common
stock for
$80,000 cash
and
in reliance on the exemption from registration provided by Section
4(2) of
the Securities Act.
These
80,000 shares of IsoRay, Inc. common stock were exchanged for 154,431
shares of common stock of IsoRay Medical, Inc. This shareholder
sold
92,800 shares of common stock of IsoRay Medical, Inc. at the time
of the
merger. The remaining 61,631 shares of IsoRay Medical, Inc. common
stock
held by this investor were exchanged for 51,915 shares of common
stock of
the Registrant at the time of the Merger, of which 10,382 are included
in
this registration.
|
·
|
As
of December 2002, the Company issued 35,200 shares of its common
stock
pursuant to §83(b) (subject to substantial risk of forfeiture) to certain
shareholders as compensation for their guarantee of notes payable to
Benton-Franklin Economic Development District and in reliance on
the
exemption from registration provided by Section 4(2) of the Securities
Act. The transaction was recorded at the fair value of the shares,
estimated to be $35,200, as management considered it to be more
readily
determinable than the value of the guarantees. During the business
combination among IsoRay companies, these 35,200 shares of common
stock
were exchanged for 67,950 shares of IsoRay Medical, Inc. common
stock,
which were subsequently exchanged the merger with the Registrant,
for
57,238 shares of common stock of the Registrant, none of which
are
included in this
registration.
|
Item 27.
|
Exhibits.
|
Exhibit #
|
|
Description
|
2.1
|
Merger
Agreement dated as of May 27, 2005, by and among Century Park Pictures
Corporation, Century Park Transitory Subsidiary, Inc., certain
shareholders and IsoRay Medical, Inc. incorporated by reference to
the
Form 8-K filed on August 3, 2005.
|
|
2.2
|
Certificate
of Merger, filed with the Delaware Secretary of State on July 28,
2005
incorporated by reference to the Form 8-K filed on August 3, 2005.
|
|
3.1
|
Articles
of Incorporation and By-Laws are incorporated by reference to the
Exhibits
to the Registrant's Registration Statement of September 15,
1983.
|
3.2
|
Certificate
of Designation of Rights, Preferences and Privileges of Series
A and B
Convertible Preferred Stock, filed with the Minnesota Secretary
of State
on June 29, 2005 incorporated by reference to the Form 8-K filed
on August
3, 2005.
|
|
3.3
|
Restated
and Amended Articles of Incorporation incorporated by reference
to the
Form 10-KSB filed on October 11, 2005.
|
|
4.2
|
Form
of Lock-Up Agreement for Certain IsoRay Medical, Inc. Shareholders
incorporated by reference to the Form 8-K filed on August 3,
2005.
|
|
4.3
|
Form
of Lock-Up Agreement for Anthony Silverman incorporated by reference
to
the Form 8-K filed on August 3, 2005.
|
|
4.4
|
Form
of Registration Rights Agreement among IsoRay Medical, Inc., Century
Park
Pictures Corporation and the other signatories thereto incorporated
by
reference to the Form 8-K filed on August 3, 2005.
|
|
4.5
|
Form
of Escrow Agreement among Century Park Pictures Corporation, IsoRay
Medical, Inc. and Anthony Silverman incorporated by reference to
the Form
8-K filed on August 3, 2005.
|
|
4.6
|
Form
of Escrow Agreement among Century Park Pictures Corporation, IsoRay
Medical, Inc. and Thomas Scallen incorporated by reference to the
Form 8-K
filed on August 3, 2005.
|
|
4.7
|
Amended
and Restated 2005 Stock Option Plan incorporated by reference to
the Form
S-8 filed on August 19, 2005.
|
|
4.8
|
Amended
and Restated 2005 Employee Stock Option Plan incorporated by reference
to
the Form S-8 filed on August 19, 2005.
|
|
4.9
|
Form
of Registration Right Agreement among IsoRay Medical, Inc., Meyers
Associates, L.P. and the other signatories thereto, dated October
15,
2004, incorporated by reference to the Form SB-2 filed on November
10,
2005.
|
|
4.10
|
Form
of Registration Rights Agreement among IsoRay, Inc., Meyers Associates,
L.P. and the other signatories thereto, dated February 1, 2006,
incorporated by reference to the Form SB-2/A1 filed on March 24,
2006.
|
|
4.11
|
Form
of IsoRay, Inc. Common Stock Purchase Warrant, incorporated by
reference
to the Form SB-2/A1 filed on March 24, 2006.
|
|
5.1
|
Opinion
of Keller Rohrback, P.L.C., filed herewith.
|
|
10.2
|
Universal
License Agreement, dated November 26, 1997 between Donald C. Lawrence
and
William J. Stokes of Pacific Management Associates Corporation,
incorporated by reference to the Form SB-2 filed on November 10,
2005.
|
|
10.3
|
Royalty
Agreement of Invention and Patent Application, dated July 12, 1999
between
Lane A. Bray and IsoRay LLC, incorporated by reference to the Form
SB-2
filed on November 10, 2005.
|
|
10.4
|
Tri-City
Industrial Development Council Promissory Note, dated July 22,
2002, filed
herewith.
|
|
10.5
|
Section
510(k) Clearance from the Food and Drug Administration to market
Lawrence
CSERION Model CS-1, dated March 28, 2003, incorporated by reference
to the
Form SB-2 filed on November 10, 2005.
|
|
10.6
|
Battelle
Project No. 45836 dated June 20, 2003, filed herewith.
|
|
10.7
|
Applied
Process Engineering Laboratory Apel Tenant Lease Agreement, dated
April
23, 2001 between Energy Northwest and IsoRay, LLC, filed
herewith.
|
|
10.8
|
Work
for Others Agreement No. 45658, R2, dated April 27, 2004 between
Battelle
Memorial Institute, Pacific Northwest Division and IsoRay Products
LLC,
filed herewith.
|
|
10.9
|
Development
Loan Agreement for $230,000, dated September 15, 2004 between
Benton-Franklin Economic Development District and IsoRay Medical,
Inc.,
filed herewith.
|
|
10.10
|
Registry
of Radioactive Sealed Sources and Devices Safety Evaluation of
Sealed
Source, dated September 17, 2004, filed herewith.
|
|
10.11
|
CRADA
PNNL/245, "Y-90 Process Testing for IsoRay", dated December 22,
2004
between Pacific Northwest National Laboratory and IsoRay Medical
Inc.,
including Amendment No. 1, filed herewith.
|
|
10.12
|
Intentionally
Omitted
|
|
10.13
|
Amendment
1 to Agreement 45658, dated February 23, 2005 between Battelle
Memorial
Institute Pacific Northwest Division and IsoRay Medical, Inc.,
filed
herewith.
|
|
10.14
|
Equipment
Lease Agreement dated April 14, 2005 between IsoRay Medical, Inc.
and
Nationwide Funding, LLC, filed herewith.
|
|
10.15
|
Lease
Agreement, Rev. 2, dated November 1, 2005 between Pacific EcoSolutions,
Inc. and IsoRay Medical, Inc., filed herewith.
|
|
10.16
|
Master
Lease Agreement Number 5209, dated May 7, 2005 between VenCore
Solutions
LLC and IsoRay Medical, Inc., filed herewith.
|
|
10.17
|
Contract
#840/08624332/04031 dated August 25, 2005 between IsoRay, Inc.
and the
Federal State Unitary Enterprise << Institute of Nuclear Materials
>>, Russia, incorporated by reference to the Form SB-2 filed on
November 10, 2005.
|
|
10.18
|
State
of Washington Radioactive Materials License dated October 6, 2005,
incorporated by reference to the Form SB-2 filed on November 10,
2005.
|
|
10.19
|
Express
Pricing Agreement Number 219889, dated October 5, 2005 between
FedEx and
IsoRay Medical, Inc., incorporated by reference to the Form 10-QSB
filed
on November 21, 2005.
|
|
10.20
|
Girard
Employment Agreement, dated October 6, 2005 between Roger E. Girard
and
IsoRay, Inc., incorporated by reference to the Form 10-QSB filed
on
November 21, 2005.
|
|
10.21
|
Contract
Modification Quality Class G, dated October 25, 2005 to Contract
Number
X40224 between Energy Northwest and IsoRay, Inc., incorporated
by
reference to the Form 10-QSB filed on November 21,
2005.
|
|
10.22
|
Agreement
dated August 9, 2005 between the Curators of the University of
Missouri
and IsoRay Medical, Inc., filed
herewith.
|
10.23
|
SICAV
ONE Securities Purchase Agreement, dated December 7, 2005, by and
between
IsoRay, Inc. and Mercatus & Partners, Ltd., incorporated by reference
to the Form 8-K filed on December 12, 2005.
|
|
10.24
|
SICAV
TWO Securities Purchase Agreement, dated December 7, 2005, by and
between
IsoRay, Inc. and Mercatus & Partners, Ltd., incorporated by reference
to the Form 8-K filed on December 12, 2005.
|
|
10.25
|
Economic
Development Agreement, dated December 14, 2005, by and between
IsoRay,
Inc. and the Pocatello Development Authority, incorporated by reference
to
the Form 8-K filed on December 20, 2005.
|
|
10.26
|
License
Agreement, dated February 2, 2006, by and between IsoRay Medical,
Inc. and
IBt SA, incorporated by reference to the Form 8-K filed on March
24, 2006
(confidential treatment requested).
|
|
10.27
|
Benton
Franklin Economic Development District Loan Covenant Waiver Letter,
dated
as of March 31, 2005, filed herewith.
|
|
10.28
|
Service
Agreement between IsoRay, Inc. and Advanced Care Medical, Inc.,
dated
March 1, 2006, filed herewith.
|
|
16.1
|
Letter
from S.W. Hatfield, CPA to the SEC dated December 13, 2005, incorporated
by reference to the Form 8-K filed on December 14,
2005.
|
|
21.1
|
Subsidiaries
of the Registrant, incorporated by reference to the Form 10-KSB
filed on
October 11, 2005.
|
|
23.1
|
Consent
of Keller Rohrback, P.L.C. (included in Exhibit 5.1)
|
|
23.2
|
Consent
of S.W. Hatfield, CPA, filed herewith.
|
|
23.3.
|
Consent
of DeCoria, Maichel & Teague, P.S., filed
herewith.
|
Item 28.
|
Undertakings.
|
By: | /s/ Roger E. Girard |
Roger
E. Girard, Chairman and Chief Executive
Officer
|
Signature
|
Title
|
Date
|
||
/s/
Roger E. Girard
Roger
E. Girard
|
Chief
Executive Officer and Chairman
|
April
26, 2006
|
||
/s/
Michael K. Dunlop
Michael
K. Dunlop
|
Chief
Financial Officer and Principal Accounting Officer
|
April
26, 2006
|
||
/s/
Dwight Babcock
Dwight
Babcock
|
Director
|
April
26, 2006
|
||
/s/
Stephen R. Boatwright
Stephen
R. Boatwright
|
Director
|
April
26, 2006
|
||
/s/
Robert R. Kauffman
Robert
R. Kauffman
|
Director
|
April
26, 2006
|
||
/s/
Thomas C. Lavoy
Thomas
C. Lavoy
|
Director
|
April
26, 2006
|
||
/s/
Albert Smith
Albert
Smith
|
Director
|
April
26, 2006
|
||
/s/
David J. Swanberg
David
J. Swanberg
|
Director
|
April
26, 2006
|
Law
Offices of
Keller
Rohrback
P.L.C.
|
Suite
900
National
Bank Plaza
3101
N. Central Avenue
Phoenix,
Arizona 85012-2600
telephone
(602) 248-0088
facsimile
(602) 248-2822
Attorneys
at Law
|
ISORAY,
INC.
|
BATTELLE
MEMORIAL INSTITUTE
Pacific
Northwest Division
|
|
By
/s/
Donald Segna
|
By
/s/
Kerry Cullerton
|
|
Name
DONALD
R. SEGNA
|
Name
Kerry
Cullerton
|
|
Title
CEO
|
Title
Contracting
Officer
|
|
Date
6/20/03
|
Date
5/13/03
|
ISORAY,
LLC
|
G
|
|
(Tenant
Name)
|
(Tenant
class)
|
|
(see
paragraph 5A)
|
Rent
Space
Type
|
Rented
Usable
Square
Feet (USF)
|
Rental
Rate
$/USF/MO
|
Monthly
Rent
|
Entrepreneur
Lab
|
145
|
$1.040
|
$150.80
|
Class
G
-
|
Lessee
’
s
allowable use of Premises is limited to general research, development
and
testing not routinely involving the use of chemicals or the handling
or
generation of chemical or dangerous wastes or causing environmental
hazards. Certain materials that are incidental to Lessees activities
but
have specific handling and disposal requirements (such as lubricants
and
solvents) will be identified by the parties and subjected to applicable
APEL policies, protocols and procedures.
|
Class
W -
|
Lessee
’
s
allowable use of Premises includes Class G activities, plus the
routine
handling and disposal of limited volumes of chemicals and hazardous
materials in solid, liquid or gaseous forms.
|
Class
R -
|
Lessee
’
s
allowable use of Premises includes Class W activities, plus the
handling
and disposal of such volumes of dangerous wastes that the
Lessee
’
s
activities are subject to the requirements of the APEL special
RCRA./RD&D permit.
|
Name:
|
Dennis
R. McCord
|
|
Office
Address:
|
P.O.
Box 968
|
|
Richland,
WA 99352
|
||
Work
Phone Number:
|
(509)377-4127
|
|
Pager
Number:
|
|
|
After
Hours Number:
|
|
1.
|
Snow
removal and ice control in parking areas and sidewalks;
|
|
2.
|
Painting
of interior and exterior of the building as required for good maintenance
practice;
|
|
3.
|
Scheduled
routine preventive maintenance of existing building mechanical,
electrical
and heating, ventilation, and air conditioning (HVAC) systems to
minimize
breakdown;
|
|
4.
|
Repair
or replacement of existing building mechanical, electrical and
HVAC
systems caused by wear and tear during ordinary use of these systems.
This
includes required relamping of interior and exterior light
fixtures;
|
|
5.
|
Grounds
maintenance including complete grass, tree, and shrub care and
clean-up
plus maintenance and repair of automatic underground sprinkler
system;
|
|
6.
|
Pest
control on interior (sprays will not be used on interiors) and
exterior of
building to control ants, insects, rodents, or other common pests
to
maintain the Premises in habitable condition;
|
|
7.
|
Replacement/repair
of exterior and interior worn or failed structural components of
the
building.
|
|
8.
|
Replacement
of carpet and drapes and/or blinds as needed. Replacements should
be color
coordinated with the existing draperies and/or blinds and floor
coverings.
|
|
9.
|
Perform
or have performed all necessary inspections, periodic testing,
and
maintenance of elevators, fire extinguishers, fire alarm, and fire
preventive equipment and systems in accordance with applicable
laws,
regulations and warranties.
|
|
10.
|
Planned
electrical outages, of any duration, affecting the Premises, will
not be
initiated by the Lessor without notification of the Lessee at least
48
hours in advance of such outage.
|
|
11.
|
In
the event a fire suppression or detection system is out of service,
the
Lessor shall notify the Lessee and provide a manned fire watch
during
non-working hours. The fire watch shall be performed on a minimum
frequency of every two (2) hours.
|
1.
|
Daily
(Monday through Friday)
|
a.
|
Trash
receptacles shall have plastic liners. Receptacles shall be emptied
every
other day with the trash removed from the building.
|
|
b.
|
Dust
desks, tables, and other office furniture and counter tops with
approved
treated wiping cloth. Do not dust desks if there are papers on
them. (Use
of feather dusters not permitted.)
|
|
c.
|
Dust
all ledges and other flat surfaces, except as noted in
2.a.
|
|
d.
|
Properly
arrange furniture, as applicable.
|
|
e.
|
Dust
mop all vinyl and linoleum floors with approved treated mop cover,
and
remove spots from spills or tracking.
|
|
f.
|
Vacuum
carpeted areas as required.
|
|
g.
|
Wash
and clean thoroughly all restrooms, including floors, fixtures
and
mirrors.
|
|
h.
|
Refill
paper towel racks, soap dispensers, toilet paper and toilet seat
cover
racks as needed.
|
|
i.
|
Clean
all lavatories and hardware; mop floors every other
day.
|
|
j.
|
Clean
drinking fountains.
|
|
k.
|
Clean
and refill sand urns.
|
|
l.
|
Remove
fingerprints from door glass as needed.
|
|
m.
|
Clean
entryways as needed; remove spider webs from entryways.
|
|
n.
|
Sweep
entryway landings and steps.
|
|
o.
|
Wash
and clean thoroughly lunchroom/vending room floors, table and counter
tops, sink, and exterior surfaces of
appliances.
|
2.
|
Once
a Week
|
a.
|
Clean
air vents.
|
3.
|
Once
a Month
|
a.
|
Clean
linoleum and vinyl floors and re-wax.
|
|
b.
|
Clean
venetian blinds.
|
4.
|
Once
Every Three (3) Months
|
a.
|
Wash
trashcans as required.
|
5.
|
Once
every Six (6) Months
|
a.
|
Vacuum
drapes.
|
|
b.
|
Wash
inside and outside of windows.
|
6.
|
Yearly
|
a.
|
Shampoo
carpet.
|
|
b.
|
Clean
drapes as required.
|
|
c.
|
Clean
light fixtures.
|
1.
|
shall
be primary insurance as respects the Lessor for any and all covered
Lessee
liabilities arising from an act or omission of the Lessee or any
of its
agents, contractors, representatives, licenses, or invitees. Any
such
insurance maintained by the Lessor shall be excess of Lessee
’
s
insurance and shall not contribute to it. The liability of Lessee
and any
of its insures shall not be reduced, offset, or otherwise affected
by the
existence and/or collectability of any insurance maintained by
Lessor;
and
|
2.
|
shall
contain a provision whereby the carrier agrees not to cancel or
significantly modify the insurance without thirty (30) days prior
to
written notice to the Lessor; and
|
3.
|
shall
name the Lessor as additional insured; and
|
4.
|
shall
not contain a severability of interests
exclusion.
|
TO
LESSOR at:
|
Energy
Northwest
|
|||
Attention:
Mr. S.J. Newsom
|
||||
Mail
Drop 817
|
||||
P.O.
Box 968
|
||||
Richland,
WA 99352
|
||||
TO
LESSEE at:
|
Dave
Swanberg
|
|||
IsoRay,
LLC
|
||||
1863
Alder
|
||||
Richland,
WA 99352
|
1.
|
Amendments
or Supplemental Agreements to APEL Lease
|
|
2.
|
APEL
Lease
|
|
3.
|
Exhibit
A, Description of Premises
|
|
4.
|
Exhibit
B, Applicable Protocols, Policies, Procedures and Other
Documents
|
/s/
Samuel Newsom
|
Pr.
Contracting Officer
|
4/23/01
|
||
LESSOR:
|
Title
|
Date
|
||
/s/
David Swanberg
|
Assistant
Manager, IsoRay
|
4/23/01
|
||
LESSEE:
|
Title
|
Date
|
||
Supply
System Contract #
|
Revision
No: 4
|
|||
Tenant
Lease Agreement #
|
Effective
Date _______
|
STATE OF WASHINGTON ) | ||
)
ss.
|
||
County
of Benton
)
|
/s/ Mary E. Zilar | ||
NOTARY PUBLIC in and for the State of Washington, | ||
Residing at Kennewick, WA 99336 | ||
My
commission expires 11-29-03
|
||
STATE OF WASHINGTON ) | ||
)
ss.
|
||
County
of Benton
)
|
/s/ Mary E. Zilar | ||
NOTARY PUBLIC in and for the State of Washington, | ||
Residing at Kennewick, WA 99336 | ||
My
commission expires 11-29-03
|
A.
|
Advance
Payment.
The Sponsor shall advance
Eighty
Thousand dollars ($80,000)
payable
upon execution of the Agreement. Advance payment shall be recorded
in the
Contractor
’
s
account.
|
B.
|
Monthly
Payments.
The Sponsor shall pay monthly thereafter upon submittal of
invoices
representing
actual costs incurred until the last three months of the
Agreement term.
At this time, the advance payment account shall be liquidated
by charging
costs incurred during this last period. Advance payment in
excess of total
costs incurred by the Contractor under this Agreement shall
be refunded to
the Sponsor at the conclusion of the
project.
|
1.
|
Invoices
will be submitted to the Sponsor at the following
address:
|
2.
|
Payments
by the Sponsor will be directed as
follows:
|
C.
|
Applicable
Currency
.
All payments due the Contractor under this Agreement, including
cost
estimates and obligations of funds, shall be in United States dollars
($
U.S.).
|
A.
|
“
Subject
Invention
”
means any invention or discovery of the Contractor, or, to the
extent the
Sponsor is performing any work under this Agreement, of the Sponsor,
conceived in the course of or under this Agreement, or, in the
case of an
invention previously conceived by the Sponsor, first actually reduced
to
practice in the course of or under this Agreement.
“
Subject
Invention
”
includes any art, method, process, machine, manufacture, design
or
composition of matter, or any new and useful improvement thereof,
or any
variety of plant, whether patented under the patent laws of the
United
States of America or any foreign country, or
unpatented.
|
B.
|
“
Patent
Counsel
”
means the DOE Patent Counsel assisting the procuring activity which
has
the administrative responsibility for the facility where the work
under
this Agreement is to be performed.
|
1.
|
To
preserve the Contractor
’
s
and the Government
’
s
residual rights to Subject Inventions, and in patent applications
and
patents on Subject Inventions, the Sponsor shall take all actions
in
reporting, electing, filing on, prosecuting, and maintaining invention
rights promptly, but in any event, in sufficient time to satisfy
domestic
and foreign statutory and regulatory time requirements, or, if
the Sponsor
decides not to take appropriate steps to protect the invention
rights, it
shall notify the Contractor in sufficient time to permit either
the
Contractor or the Government to file, prosecute, and maintain patent
applications and any resulting patents prior to the end of such
domestic
or foreign statutory or regulatory time
requirements.
|
2.
|
The
Sponsor shall convey or ensure the conveyance of any executed instruments
necessary to vest in either the Contractor or the Government the
rights
set forth in this article.
|
3.
|
With
respect to any Subject Invention in which the Sponsor obtains title,
the
Sponsor hereby grants to the Government a non-exclusive, nontransferable,
irrevocable, paid-up license to practice or have practiced by or
on behalf
of the United States the Subject Invention throughout the
world.
|
4.
|
The
Sponsor shall provide the Government a copy of any patent application
filed on a Subject Invention within 6 months after such application
is
filed, including its serial number and filing
date.
|
5.
|
Preference for U.S. Industry. Notwithstanding any other provision of this article, the Sponsor agrees that neither it nor any assignee will grant to any person the exclusive right to use or sell any Subject Invention in the United States unless such person agrees that any products embodying the Subject Invention or produced through the use of the Subject Invention will be manufactured substantially in the United States. However, in individual cases, the requirement for such an agreement may be waived by DOE upon a showing by the Sponsor or its assignee that reasonable by unsuccessful efforts have been made to grant licenses on similar terms to potential licensees that would be likely to manufacture substantially in the United States or that under the circumstances domestic manufacture is not commercially feasible. |
6.
|
March-In
Rights. The Sponsor agrees that with respect to any Subject Invention
of
the Contractor in which it has acquired title, the DOE shall retain
the
right to require the Sponsor to grant a responsible applicant a
nonexclusive, partially exclusive, or exclusive license to use
the Subject
Invention in any field of use, on terms that are reasonable under
the
circumstances, or if the Sponsor fails to grant such a license,
to grant
the license itself. DOE may exercise this right only in exceptional
circumstances and only if DOE determines
that:
|
a.
|
the
action is necessary to meet health or safety needs that are not
reasonably
satisfied by the Sponsor; or
|
b.
|
the
action is necessary to meet the requirements for public use specified
by
Federal regulations and such requirements are not reasonably satisfied
by
the Sponsor; or
|
c.
|
such
action is necessary because a licensee of the exclusive right to
use or
sell any Subject Invention in the United States is in breach of
the
agreement required by paragraph
B(5).
|
7.
|
The
Sponsor agrees to refund any amounts received as royalty charges
on any
Subject Invention in procurement by or on behalf of the Government
and to
provide for that refund in any instrument transferring rights to
my party
in the invention.
|
8.
|
The
Sponsor agrees to include, within the specification of any U.S.
patent
applications and any patent issuing thereon covering a Subject
Invention,
the following statement.
“
The
Government has rights in this invention pursuant to (specify this
underlying Agreement).
”
|
A.
|
The
Sponsor shall furnish the Patent Counsel a written report containing
full
and complete technical information concerning each Subject Invention
it
makes within 6 months after conception or first actual reduction
to
practice, whichever occurs first, in the course of or under this
Agreement, but in any event prior to any on sale, public use, or
public
disclosure of such invention known to the Sponsor. The report shall
identify the contract and inventor and shall be sufficiently complete
in
technical detail and appropriately illustrated by sketch or diagram
to
convey to one skilled in the art to which the invention pertains
a clear
understanding to the extent known at the time of disclosure, of
the
nature, purpose, operation, and the physical, chemical, biological,
or
electrical characteristics of the invention. The report should
also
include any election of invention rights under this article. When
an
invention is reported under this paragraph 4.A, it shall be presumed
to
have been made in the manner specified in Section (a)(1) and (2)
of 42
U.S.C. 5908.
|
B.
|
The
Contractor shall report Subject Inventions it makes in accordance
with the
procedures set forth in contract DE-AC06-76RL01830. In addition,
the
Contractor shall disclose to the Sponsor at the same time as disclosure
to
the Department any Subject Inventions made by the Contractor under
this
Agreement and the Sponsor shall notify the Department within 6
months of
receipt of such disclosure by the Sponsor of any election of patent
rights
under this article.
|
C.
|
Requests
for extension of time for election under subparagraphs A and B
may be
granted by Patent Counsel for good cause shown in
writing.
|
1.
|
The
following definitions shall be
used.
|
A.
|
“
Generated
Information
”
means information produced in the performance of this
Agreement.
|
B.
|
“
Proprietary
Information
”
means information which is developed at private expense, is marked
as
Proprietary Information, and embodies (1) trade secrets or (2)
commercial
or financial information which is privileged or confidential under
the
Freedom of Information Act (5 U.S.C.
552(b)(4)).
|
C.
|
“
Unlimited
Rights
”
means the right to use, disclose, reproduce, prepare derivative
works,
distribute copies to the public, and perform publicly and display
publicly, in any manner and for any purpose, and to have or permit
others
to do so.
|
2.
|
The
Sponsor agrees to furnish to the Contractor or leave at the facility
that
information, if any, which is (1) essential to the performance
of work by
the Contractor personnel or (2) necessary for the health and safety
of
such personnel in the performance of the work. Any information
furnished
to the Contractor shall be deemed to have been delivered with Unlimited
Rights unless marked as Proprietary Information. The Sponsor agrees
that
it has the sole responsibility for appropriately identifying and
marking
all documents containing Proprietary Information, whether such
documents
are furnished by the Sponsor or produced under this Agreement and made
available to the Sponsor for
review.
|
3.
|
The
Sponsor may designate as Proprietary Information any Generated
Information
where such data would embody trade secrets or would comprise commercial
or
financial information that is privileged or confidential if it
were
obtained from the Sponsor. Such Proprietary Information will, to
the
extent permitted by law, be maintained in confidence and disclosed
or used
by the Contractor (under suitable protective conditions) only for
the
purpose of carrying out the Contractor
’
s
responsibilities under this Agreement. Upon completion of activities
under
this Agreement, such Proprietary Information will be disposed of
as
requested by the Sponsor. Before the Contractor releases data associated
with this Agreement to anyone, the Sponsor will be afforded the
opportunity to review that data to ascertain whether it is Proprietary
Information and if so, to mark it as
such.
|
4.
|
The
Government and Contractor agree not to disclose properly marked
Proprietary Information to anyone other than the Sponsor without
written
approval of the Sponsor, except to Government employees who are
subject to
the statutory provisions against disclosure of confidential information
set forth in the Trade Secrets Act (18 U.S.C. 1905). The Government
and
Contractor shall have the right, at reasonable times up to 3 years
after
the termination or completion of the Agreement, to inspect any
information
designated as Proprietary Information by the Sponsor, for the purpose
of
verifying that such information has been properly identified as
Proprietary Information.
|
5.
|
The
Sponsor is solely responsible for the removal of all of its Proprietary
Information from the facility by or before termination of this
Agreement.
The Government and Contractor shall have Unlimited Rights in any
information which is not removed from the facility by termination
of this
Agreement. The Government and Contractor shall have Unlimited Rights
in
any Proprietary Information which is incorporated into the facility
or
equipment under this Agreement to such extent that the facility
or
equipment is not restored to the condition existing prior to such
incorporation.
|
6.
|
The
Sponsor agrees that the Contractor will provide to the Department
a
nonproprietary description of the work performed under this
Agreement.
|
7.
|
The
Government shall have Unlimited Rights in all Generated Information
produced or information provided by the Parties under this Agreement,
except for information which is disclosed in a Subject Invention
disclosure being considered for patent protection, or which is
marked as
being Proprietary Information.
|
8.
|
Copyrights.
The Sponsor may assert copyright in any of its Generated Information,
and
may also require the Contractor, at the Sponsor
’
s
expense, to register copyright and assign copyright in any Generated
Information produced by the Contractor which the Sponsor wishes
to
copyright. Subject to the other provisions of this article, and
to the
extent that copyright is asserted, the Government reserves for
itself a
royalty-free, worldwide, irrevocable, non-exclusive license for
Governmental purposes to publish, disclose, distribute, translate,
duplicate, exhibit, prepare derivative works, and perform any such
data
assigned to the Sponsor.
|
9.
|
The
terms and conditions of this article shall survive the Agreement,
in the
event that the Agreement is terminated before completion of the
Statement
of Work.
|
BATTELLE MEMORIAL INSTITUTE | ISORAY PRODUCTS LLC |
PACIFIC NORTHWEST DIVISION | |
Name /s/ Alta Jones | Name /s/ Donald Segna |
Title Contracting Officer | Title PRESIDENT |
Date 4-27-04 |
Date
4/27/04
|
·
|
PNNL
and IsoRay personnel will identify laboratory space and equipment
appropriate for isotope separation and seed production. PNNL will
prepare
any required facility modification documentation.
|
·
|
A
mini-hot cell located in Room 203 of the Shielded Analytical Laboratory
(SAL) in the RPL was used previously for Cs-131 isotope separation.
PNNL
will remove any existing equipment and decontaminate the hot cell
as
needed for IsoRay use. IsoRay will arrange for the fabrication
of a new
airlock using drawings approved by PNNL. IsoRay will pay for the
installation of the airlock.
|
·
|
Procedures
for isotope separations, isotope attachment, seed assembly, laser
welding,
seed decontamination/leak testing, seed assay will be updated as
necessary
to support larger quantity operations.
|
·
|
Radiological
work permits (RWPs) will be updated from the previous 5 to 10 seed
research and development phase to weekly isotope separation cycles
and
production lots of 100 to 1000 seeds. This work will be approved
for
completion in the 325 Building Radiochemical Processing Laboratory
(RPL).
|
·
|
This
task will include testing of updated equipment and seed components
for
safety, operability, and ALARA.
|
·
|
Equipment
modifications identified in Task 1 will be conducted. This will
entail
installation of target transfer mechanism (air lock) in the mini
hot cell
in SAL 203 and installation or decontamination of a glove box for
housing
the seed welder. PNNL will provide a currently used glovebox. IsoRay
will
pay for the installation of the glovebox in SAL 203 or other laboratory
space provided by PNNL.
|
·
|
Glassware,
piping, pumps, hot plates, heat lamps, off-gas traps, etc, will
be
installed in the SAL mini-hot cell at IsoRay expense to support
the
isotope separation and purification
process.
|
·
|
Radiochemical
separations will be conducted in the SAL mini-hot cell. Each cycle
will
begin with receipt or irradiated barium carbonate targets. Targets
will be
processed in batches of approximately 200 to 500 g. Each target
will be
“
milked
”
for an average of four cycles.
|
·
|
Isotope
processing involves two separation and boil-down states followed
by
sampling and analysis to determine purity. Once separated from
the barium,
cesium-131 can be processed in a fume hood due to the relatively
low
energy of the radiation emissions (
~
30
KeV X-Rays).
|
·
|
The
purity and activity of the cesium-131 product will be determined
by gamma
and/or X-ray spectroscopy and other analytical methods for quality
control. Purified isotope that meets IsoRay purity specifications
is then
ready for transfer to another location within the RPL for seed
production.
Requirements for radiochemical purity of the brachytherapy seeds
are as
indicated on the product labeling which has been reviewed and approved
by
the US Food and Drug Administration (>99.9% Cs-131, <0.01% other
isotopes). In addition, the brachytherapy seeds are considered
to be
sealed sources of therapeutic radiation. All seeds will be tested
for leak
tightness in accordance with ISO 9978,
“
Radiation
Protection
-
Sealed Radioactive Sources
-
Leakage Test Methods.
”
The activity of the seeds will be determined by assay using a well
ionization chamber calibrated against a standard traceable to
NIST.
|
·
|
The
initial step in seed production will be loading cesium-131 onto
pre-manufactured seed cores. The cores will be loaded by contacting
with
cesium-bearing solution. The loaded cores will then be dried and
inserted
into pre-welded titanium
“
cans
”
(tubes with one end welded) provided by IsoRay.
|
·
|
Cans
with cores inserted will be transferred to a welding station where
the
second end of the seed will be welded to form a sealed radioactive
source.
The last welding equipment will be similar to that used previously
at the
RPL to produce the prototype radioactive seeds. Personnel will
follow
approved laser safety procedures and radiation work permits at
all times.
The welding equipment will be provided, operated, and maintained
by
IsoRay. Welding will be performed by IsoRay personnel utilizing
an
IsoRay-developed procedure in a glove box provided by PNNL. The
procedure
will be reviewed by PNNL to ensure compliance with safe operations
and
requirements within the Radiochemical Processing Laboratory.
PNNL
’
s
support during welding of seeds will be limited to operational
oversight
to ensure compliance to PNNL procedures and operational protocol.
PNNL
will retain shutdown authority for any activity conducted by IsoRay
that
is deemed noncompliant with such procedures and
protocol.
|
·
|
Each
seed will be leak tested and decontaminated by IsoRay personnel
according
to established procedures developed by IsoRay. PNNL will review
such
procedures to ensure compliance with safe operations and requirements
within the Radiochemical Processing Laboratory. PNNL will provide
analytical support to IsoRay for leak testing and seed decontamination
activities. A representative number of seeds will be assayed for
apparent
activity using a dose calibrator and segregated based on assay
amount and
batch number. IsoRay, alone, will certify conformance to leak testing
and
decontamination requirements.
|
·
|
Following
certification by IsoRay, finished seeds will be packaged in shielded
containers for shipment to physicians and medical research centers.
IsoRay
will coordinate with users to determine quantities and seed delivery
dates. IsoRay will provide packaging and seed labeling materials
including
labeling of the final packages for shipment. PNNL will support
the
packaging/shipping activity by providing staff labor for packaging
and
radiation control. PNNL certified shipping personnel will provide
instructions and oversight to IsoRay in preparing materials for
shipment
and will approve the actual shipments.
|
·
|
All
regulated wastes associated with this project will be properly
disposed of
by PNNL personnel at IsoRay
expense.
|
LENDER:
|
Benton-Franklin
Economic Development District
|
||
BORROWER:
|
IsoRay
Medical, Inc.
|
||
PROJECT:
|
Business
start-up Medical isotope production
|
||
GUARANTORS:
|
Lane
Bray, Michael Dunlop, Karen Thompson, Bob Schenter, Don Segna,
Linda
Bates, Dave Swanberg, Larry Fookes, Tom Collier, Alan Waltar, Marlene
Oliver, Roger Girard, John Hrobsky and John
Boland.
|
||
PROJECT
AREA:
|
Benton
County
|
||
PROGRAM
AUTHORITY:
|
This
loan is authorized pursuant to the provisions of Title IX of the
Economic
Development Act of 1965, as amended.
|
(a)
|
Each
disbursement of loan funds by BFEDD, whether in installments or
in a lump
sum, shall first be requested by Borrower, in writing, and shall
be in
such amount as is supported by invoices or other documents acceptable
to
BFEDD.
|
(b)
|
The
total cumulative amount of such disbursements shall not exceed
the maximum
amount of the loan as set forth above.
|
(c)
|
No
more than (1) disbursement of loan funds will be made each week,
and all
disbursement of funds will be accomplished by
January
30th, 2005
.
BFEDD is under no obligation to disburse funds to Borrower after
that
date. Additionally, if at any time during that six-month period
there
remain funds un-disbursed and, in the sole opinion of BFEDD, the
Borrower
is failing to meet any terms of this loan agreement and its exhibits,
including the promissory note, BFEDD has the option of refusing
to
disburse the balance of the funds and the Borrower will be obligated
only
for the funds drawn to date plus interest and fees on that
amount.
|
(d)
|
The
loan of funds shall be evidenced by a Promissory Note; a copy of
which is
attached hereto, marked Exhibit
“
A
”
,
and by this reference incorporated herein.
|
(e)
|
The
loan shall be repaid in accordance with the terms of the Promissory
Note.
BFEDD will provide an amortization schedule when final disbursement
of
loan funds is made.
|
(a)
|
A
Promissory Note (Exhibit
“
A
”
)
|
(b)
|
A
security position in all equipment, materials and inventory as
evidenced
by a Security Agreement, which is attached hereto as Exhibit
“
B
”
,
and by this reference incorporated herein.
|
(c)
|
The
personal guarantee of
Lane
Bray, Michael Dunlop, Karen Thompson, Don Segna, Linda Bates, Dave
Swanberg, Larry Fookes, Tom Collier, Alan Waltar, Marlene Oliver,
Bob
Schenter, Roger Girard, John Hrobsky, and John Boland
,
said guarantee being attached hereto as Exhibit
“
C
”
-
C-10 and incorporated herein by
reference.
|
(a)
|
As
defined by generally accepted accounting principles, the Borrower
will not
allow its net working capital position ratio of current assets
to current
liabilities to be less than 1.3 to 1.0.
|
(b)
|
It
will make no loans or advances to the Borrower
’
s
officers, employees, or owners, except those usually made in the
ordinary
course of business, and the total of all such loans and advances
outstanding shall not exceed Five Thousand Dollars ($5,000.00)
at any one
time.
|
(c)
|
It
will not become liable either directly or indirectly for obligations
of
others.
|
(d)
|
It
will pay no dividends and make no distributions on its ownership
interests.
|
(e)
|
It
will not further encumber its assets or incur indebtedness in addition
to
that now existing and that provided for in this Loan Agreement,
except
indebtedness regularly incurred in the ordinary course of business
and
payable within one (1) year without prior notification of the
BFEDD.
|
(f)
|
It
will not sell or transfer all or a substantial part of its assets,
except
those usually sold in the ordinary course of business.
|
(g)
|
It
will not pay annual compensation to its officers, directors (or
family
members of its officers, directors, or to any salaried individual,)
in
excess of
One
Hundred
Thousand
Dollars (
$100,00.00
)
annually for all of said persons combined during the life of the
loan.
|
(h)
|
It
will not purchase fixed assets or incur any additional long-term
lease and
lease-purchase obligations which require aggregate annual payments
exceeding
twenty-four
Thousand Dollars (
$24,000.00
)
per year. No fixed asset expenditures shall be made or lease or
lease-purchase obligations incurred, the result of which would
be to
reduce Borrower
’
s
ratio of current assets to current liabilities below 1.3 to 1.0,
subject
to re-negotiation, depending upon the need and to be reviewed by
BFEDD.
|
(i)
|
It
will not permit its consolidated ratio of long-term debt (including
long-term lease and lease-purchase obligations that shall be capitalized
for the purposes of this Agreement) to equity (including subordinated
debt) to exceed at any time 3.0 to 1.0. Borrower certifies that
there is
currently no long-term debt except as may be disclosed on page
2
hereinabove.
|
(j)
|
It
will not purchase, retire, or acquire, except by gift, any of its
ownership interest, and it will not merge with any other corporation
or
business entity except as approved by the BFEDD, except in the
case of the
normal sale or acquiring of stock.
|
(k)
|
Borrower
will not pay annual rent on the premises at 350 Hills Street, Suite
106,
Richland, WA 99352, in excess of
forty-five
Thousand Dollars (
$45,000.00
)
during the life of the loan.
|
(a)
|
Be
awarded in accordance with all applicable laws and
regulations.
|
(b)
|
Prohibit
discrimination against any person who is employed in the work covered
by
such contracts, or who is a candidate for such employment, because
of sex,
race, age, religion, color, physical handicap, national origin,
or marital
status. Such provisions shall include, but not be limited to, the
following: employment upgrading, promotion or transfer, recruitment,
advertising, layoff or termination, rates of pay or other forms
of
compensation, and selection for training, including apprenticeship.
|
(c)
|
Require
contractor compliance with all air pollution and environmental
control
rules, regulations, ordinances, and statutes that apply to work
performed
pursuant to the contract, including, but not limited to, both the
National
Environmental Protection Act and the Washington State Environmental
Protection Act.
|
(a)
|
Continuously
operate in an efficient and economical manner all Project facilities
acquired, improved, maintained, and completed in full or in part,
as a
result of the loan made hereunder.
|
(b)
|
Maintain
in full force and effect, at the time of final approval by BFEDD
and prior
to disbursement of funds, and effective fire and hazard insurance
policy
to the full insurable value, and a liability insurance policy in
the
minimum amount of $1,000,000. Such policy or policies shall be
in a form
satisfactory to BFEDD and
|
(1)
|
Borrower
shall, upon receipt thereof, forthwith submit to BFEDD copies thereof,
including any new or renewal policies effective during the term
of this
Agreement. Copies of such policy or policies shall be submitted
at least
twenty (20) days prior to the effective date or dates
thereof.
|
(2)
|
Such
policy or policies shall contain the following
endorsement:
|
“
The
Benton-Franklin Economic Development District, its officers, employees,
and agents, are hereby declared to be additional insured, and
lender
’
s
loss payee under the terms of this policy, as to activities of
both
IsoRay
Medical, Inc.
and Benton-Franklin Economic Development District with respect
to the
Project, and this policy shall not be cancelled without thirty
(30)
days
’
written notice to Benton-Franklin Economic Development
District.
”
|
|
(3)
|
Loss
under said fire hazard and liability insurance policy or policies
shall be
payable to BFEDD, as its interest may appear, for deposit in an
appropriate trust fund. If BFEDD deems it appropriate, the proceeds
may be
paid to Borrower upon Borrower
’
s
application for the reconstruction of the destroyed or damaged
facilities.
|
(4)
|
BFEDD
shall not be held liable for the payment of any premiums or assessments
of
such insurance policy or policies; EXCEPT THAT, should the Borrower
fail
to ay any insurance premiums when due, or fail to maintain in full
force
and effect insurance as provided for in this paragraph, BFEDD may
pay the
insurance premium, or provide insurance as provided for in this
paragraph,
and the amount so paid for said insurance with interest at the
rate set
forth in Exhibit
“
A
”
,
shall be added to and become a part of the amount due under the
terms of
Exhibit
“
A.
”
|
(a) |
The
Davis-Bacon Act, as amended (40 U.S.C. 276a-276a(5); 42 U.S.C.
3222).
|
(b) |
The
Contract Work Hours Standard Act, as amended (40 U.S.C.
327-332)
|
(c) |
The
Copeland
“
Anti-Kickback
”
Act, as amended (40 U.S.C. 276(c); 18 U.S.C.
847)
|
(d) |
No
federally appropriated funds have been paid or will be paid by
or on
behalf of the undersigned to any person for influencing or attempting
to
influence an officer or employee of any agency, a member of Congress,
an
officer or employee of Congress, or an employee of a member of
Congress in
connection with the awarding of any Federal contract, the making
of any
Federal grant, the making of any Federal loan, the entering into
of any
cooperative agreement, and the extension, continuation, renewal,
amendment, or modification of any Federal contract, grant, loan,
or
cooperative agreement.
|
(e) |
If
any funds other than federally appropriated funds have been paid
or will
be paid to any person for influencing or attempting to influence
an
officer or employee of any agency, a member of Congress, an officer
or
employee of Congress, or an employee of a member of Congress in
connection
with this Federal contract, grant, or cooperative agreement, the
undersigned shall complete and submit Standard Form LLL,
“
Disclosure
Form to Report Lobbying,
”
in
accordance with its instructions.
|
(f) |
Title
VI of the Civil Rights Act of 1964, as amended (42 U.S.C. 2000(d)
-
2000(d)(4)); and Executive Orders 11114, 11246, and
11375.
|
(g) |
All
applicable laws, rules, and regulations applicable under the Title
IX EDA
Revolving Loan Fund Grant to BFEDD.
|
(h) |
All
Block Grant Requirements (if applicable) under Exhibit
“
E
”
(attached hereto and incorporated herein by reference). In this
regard,
Borrower shall be required to execute and shall be bound by Exhibit
“
E
”
and its attachments.
|
By:
/s/ Gwen Luper
|
By:
/s/ Roger Girard
|
||
Gwen
Luper
|
Roger Girard, President, CEO
|
||
Title:
Executive Director
|
|||
/s/ Michael Dunlop
|
|||
Michael Dunlop,
Secretary/Treasurer/CFO
|
$230,000 |
15
th
September, 2004
|
||
Richland, Washington |
IsoRay
Medical, Inc
.
|
||
By:
/s/ Roger Girard
|
||
|
Roger Girard, President, CEO | |
By:
/s/
Michael Dunlop
|
||
Michael
Dunlop, Secretary/Treasurer
|
||
Exhibit
“
A
”
-
Page 1
|
Initials
/s/
MFD
|
|
Initials
/s/
RG
|
IsoRay
Medical, Inc
.
|
||
By:
/s/ Roger Girard
|
||
|
Roger Girard, President, CEO | |
By:
/s/
Michael Dunlop
|
||
Michael
Dunlop,
Secretary/Treasurer/CFO
|
1.
|
Borrower
hereby warrants that Borrower is the sole owner and in possession
of all
the Collateral, and that the Collateral is free of all liens,
encumbrances, and adverse claims, with the exception of the security
agreements herein created. Borrower agrees, at his or her own expense,
to
appear in and defend any and all actions and proceedings affecting
title
to the Collateral or any part thereof, or affecting the security
interest
of Bank therein.
|
2.
|
Borrower
hereby agrees: To do all acts which may be necessary to maintain,
preserve, and protect the Collateral and to keep the Collateral
in good
condition and repair; not to cause or permit any waste or unusual
or
unreasonable depreciation thereof or any act for which the Collateral
might be confiscated; to pay before delinquency all taxes, assessments,
and liens now or hereafter imposed upon the Collateral; not to
sell,
lease, encumber, or dispose of all or any part of the Collateral;
at any
time upon demand of Bank, to exhibit to and allow inspection by
Bank of
the Collateral; not to remove or permit the removal of the Collateral,
other than motor vehicles, from the premises where it is now located,
nor
of any motor vehicle from the State of Washington, nor to change
the
address where any motor vehicle is regularly garaged, without the
prior
written consent of Bank; to provide, maintain, and deliver to Bank
policies insuring the Collateral against loss or damage by such
risks in
such amounts, forms, and companies as Bank requires with loss payable
solely to Bank. If Bank takes possession of the Collateral, the
insurance
policy or policies and any unearned or returned premium thereon
shall, at
the option of the Bank, become the sole property of Bank upon Bank
crediting the amount of any unearned premium upon the obligations
secured
hereby, such policies being hereby assigned to Bank.
|
3.
|
If
Borrower fails to make any payment or do any act as herein required,
then
Bank, but without obligation so to do, and without notice to or
demand
upon Borrower, may make such payments and do such acts as Bank
may deem
necessary to protect its security interest in the Collateral, Bank
being
hereby authorized (without limiting the general nature of the authority
herein conferred) to take possession of the Collateral, to pay,
purchase,
contest, and compromise any encumbrances, charge or lien which
in the
judgment of Bank appears to be prior or superior to its security
interest,
and in exercising any such powers and authority to pay necessary
expenses,
employ counsel and pay reasonable fees therefor, Borrower hereby
agrees to
repay immediately, and without demand, all sums so expended by
Bank,
including all reasonable attorney fees (including reasonable value
of
staff counsel) and related costs whether or not a suit is filed,
an appeal
is sought, or the matter is referred to arbitration, with interest
from
date of expenditure at the rate of twelve percent (12%) per
annum.
|
4.
|
Any
officer or employee of Bank is hereby irrevocably appointed the
attorney-in-fact of Borrower, with full power of substitution,
to sign any
certificate of ownership, registration card, application therefor,
affidavits, or documents necessary to transfer title to any of
the
Collateral, to receive and receipt for all licenses, registration
cards,
and certificates of ownership, and to do all acts necessary or
incident to
the powers granted to Bank herein, as fully as Borrower might.
Borrower
agrees to deliver to Bank all such certificates of ownership not
in
Bank
’
s
possession.
|
5.
|
Borrower
hereby assigns to Bank all rents, issues, income and profits of
or from
the Collateral. Any moneys received by Bank under the provisions
hereof
may at its option be applied upon any indebtedness secured hereby,
or
released.
|
6.
|
It
is specifically understood and agreed by each and every person
who is a
Borrower hereunder or Guarantor hereof that Bank may from time
to time and
without notice release or otherwise deal with any person now or
hereafter
liable for the payment or performance of any obligation hereunder
or
secured hereby, and renew, extend, or alter the time of terms of
payment
of any such obligation, and release, surrender, or substitute any
property
or other security for such obligation, or accept any type of further
security therefor, without in any way affecting the obligation
hereunder
of any Borrower or Guarantor; and consent is hereby given to delay
or
indulgence in enforcing payment or performance of any such obligation,
and
diligence, presentment, protest and demand and notice of every
kind, as
well as the right to require Bank to proceed against any person
liable for
the payment of any such obligation or to foreclose upon, dispose,
or
otherwise realize upon or collect or apply any other property,
real or
personal, securing any such obligation, as a condition or prior
to
proceeding hereunder, are hereby
waived.
|
7.
|
Should:
(1) default be made in the payment of any obligation, or breach
be made of
any warranty, statement, promise, term, or condition, contained
herein or
hereby secured; (2) any statement or representation made for the
purpose
of obtaining credit hereunder is determined by Bank to be false;
or (3)
Bank deem the Collateral inadequate or unsafe or in danger of misuse;
the
in any such event; Bank may, at its option and without demand first
made
and without notice to Borrower (if given, notice by ordinary mail
to
Borrower
’
s
address shown herein being sufficient), do any one or more of the
following: (a) Declare all sums secured hereby immediately due
and
payable; (b) immediately take possession of the Collateral wherever
it may
be found, using all necessary force so to do, or require Borrower
to
assemble the Collateral and make it available to Bank at a place
designated by Bank which is reasonably convenient to Borrower and
Bank,
and Borrower waives all claims for damages due to or arising from
or
connected with any such taking; (c) Proceed in the foreclosure
of
Bank
’
s
security interest and sale of the Collateral in any manner permitted
by
law, or provided for herein; (d) Sell, lease, or otherwise dispose
of the
Collateral at public or private sale, with or without having the
Collateral at the place of sale, and upon terms and in such manner
as Bank
may determine, and Bank may purchase same at any such sale; (e)
Retain the
Collateral in full satisfaction of the obligations secured thereby;
(f)
Exercise any remedies of a secured party under the Uniform Commercial
Code. Prior to any such disposition, Bank may, at its option, cause
any of
the Collateral to be repaired or reconditioned in such manner and
to such
extent as to Bank may seem advisable, and any sums expended therefor
by
Bank shall be repaid by Borrower and secured hereby. Bank shall
have the
right to enforce one or more remedies hereunder successively or
concurrently, and any such action shall not stop or prevent Bank
from
pursuing any further remedy which it may have hereunder or by law.
If a
sufficient sum is not realized from any such disposition of Collateral
to
pay all obligations secured hereby, Borrower hereby promises and
agrees to
pay Bank any deficiency.
|
8.
|
If
Bank takes possession of the Collateral and it contains any property
other
than Collateral, Bank is authorized, at Borrower
’
s
sole option, to either (a) send such other property by ordinary
mail,
parcel post, freight, or other means to Borrower at the address
show
above, unless Borrower has notified Bank of a different address
in
writing; or (b) store such other property with a public warehouse
for the
account of Borrower and send to Borrower at such address by ordinary
mail
the warehouse receipt issued therefore. Such sending or store shall
be at
Borrower
’
s
expense and risk and shall relieve Bank from all liability in connection
with such property.
|
9.
|
The
right to plead the statute of limitations as a defense to any and
all
obligations contained herein or secured hereby is waived, to the
full
extent permissible by law. Any Borrower who is a married person
hereby
expressly agrees that recourse may be had against his or her separate
property for any deficiency after sale of the Collateral. Time
and
exactitude of each of the terms, obligations, covenants and conditions
are
hereby declared to be the essence hereof. No waiver by Bank of
any breach
or default shall be deemed a waiver of any breach or default thereafter
occurring and the taking of any action by Bank shall not be deemed
to be
an election of that action, but rather the rights and privileges
and
options granted to Bank under the terms of this security agreement
shall
be deemed cumulative, the one with the other and not
alternative.
|
IsoRay
Medical, Inc
.
|
||
By:
/s/ Roger Girard
|
||
|
Roger Girard, President, CEO | |
By:
/s/
Michael Dunlop
|
||
Michael
Dunlop,
Secretary/Treasurer/CFO
|
NO. : WA-1220-S-101-S | DATE : 17 September 2004 |
PAGE:
1
of 8
|
|
SOURCE
TYPE:
|
Sealed
Brachytherapy Source
|
|
MODEL:
|
CS-1
|
|
Lawrence
CSERION Cs-131 Brachytherapy Seed
|
||
(
also known as
131
Cseed
)
|
||
DISTRIBUTOR:
|
IsoRay
|
|
Suite
106
|
||
350
Hills Street
|
||
Richland,
WA 99352
|
||
MANUFACTURER:
|
IsoRay
|
|
Suite
106
|
||
350
Hills Street
|
||
Richland,
WA 99352
|
||
ISOTOPE:
|
MAXIMUM
ACTIVITY:
|
|
Cesium-131
|
65
mCi (2.41 Gbq) Internal Activity
|
|
2-5
mCi Average Air Kerma Strength/Assay Activity
|
||
LEAK
TEST FREQUENCY:
|
Not
Required
|
|
PRINCIPAL
USE:
|
(AA)
Manual Brachytherapy
|
|
CUSTOM
SOURCE:
|
____YES
X
NO
|
NO. : WA-1220-S-101-S | DATE : 17 September 2004 |
PAGE:
2
of 8
|
|
NO. : WA-1220-S-101-S | DATE : 17 September 2004 |
PAGE:
3
of 8
|
|
SOURCE TYPE: |
Test
|
Classification
|
Test
Conditions
|
Low
Temperature
High
Temperature
|
5
|
-40
°
C
(20 min) w/ thermal shock to 20
°
C;
+600
°
(1
hr) w/ thermal shock to 20
°
C
|
External
Low Pressure
External
High Pressue
|
3
|
Two
5 min periods at 25 kPa absolute;
Two
5 min periods at 2 Mpa absolute
|
Impact
|
2
|
50
g steel weight dropped from 1 meter height
|
Vibration
|
1
|
No
Test Required
|
Puncture
|
1
|
No
Test Required
|
Bending
|
1
|
No
Test Required
|
Steam
Autoclave
|
Optional
|
121
°
C
at 29.8 psig for 20 min
|
WA-1220-S-101-S | DATE : 17 September 2004 |
PAGE:
4
of 8
|
|
Distance
from the source
(cm)
|
Dose
Rate (mR/hr)
Maximum
activity (50 mCi)
|
Dose
Rate (mR/hr)
Typical
activity (3.3 mCi)
|
5
|
1300
|
84
|
30
|
35
|
2.3
|
100
|
3.2
|
0.21
|
Test
|
Method
|
Acceptance
Criteria
|
Radionuclidic
Purity
|
Gamma
Analysis
|
>99.9%
Cs-131;
<0.01%
Ba-131; <0.1% Cs-132;
<0.05%
all other radioisotopes
|
Weld
Inspection
|
Visual
-
w/
Magnification
|
Silver
in color; with no cracks or holes
|
Leak
Test
|
ISO
9978
|
≤
0.185 kBq (≤ .005
μ
Ci)
per seed
|
Radioassay
|
Dose
Calibrator
|
0.2
to 50.0 mCi ± 5% apparent activity
|
External
Dimensions
|
Gauging
|
0.8mm
± 10% OD; 4.5 mm ± 10% length
|
Seed
Assembly
|
Visual
|
No
foreign material, dents, or scratches
|
Labeling
|
Visual
|
Information
is legible, accurate and complete
|
WA-1220-S-101-S | DATE : 17 September 2004 |
PAGE:
5
of 8
|
|
·
|
The
sealed sources shall be distributed only to specific licenses of
the
Washington State Department of Health, the U.S. Nuclear Regulatory
Commission, or an Agreement State.
|
·
|
Handling,
Storage, Use, Transfer and Disposal: To be determined by the licensing
authority. Given that these sealed sources exhibit high surface
dose rates
when unshielded, these sources should be handled by experienced
licensed
personnel using adequate remote handling equipment and
procedures.
|
·
|
Leak
testing beyond that performed by the manufacturer is not required
due to
the short half-life (9.7 days) of Cs-131.
|
·
|
Since
the seeds are non-sterile when shipped, they must be sterilized
upon
receipt prior to use using either steam (autoclave) or ethylene
oxide
(EtO). Dry heat sterilization must not be used.
|
·
|
Sources
shall not be exposed to conditions that exceed the ISO 2919 classification
of 99C53211. Despite excellent corrosion resistance of titanium,
seeds are
not to be exposed to concentrated acids or bases.
|
·
|
Licenses
should observe the manufacturer
’
s
instructions for handling and using the Cs-131 sources which are
provided
with each shipment of seeds. When not in use, seeds should be stored
in
shielded containers in a controlled area.
|
·
|
Any
excess seeds must be disposed in accordance with applicable rules
and
regulations. Unused sources may be returned to the distributor.
|
·
|
This
registration sheet and the information contained with the references
shall
not be changed without the written consent of the Washington State
Department of Health.
|
WA-1220-S-101-S | DATE : 17 September 2004 |
PAGE:
6
of 8
|
|
·
|
Application
for Safety Evaluation and Registration of IsoRay Model CS-1 Brachytherapy
Sealed Source, dated May 20, 2004.
|
·
|
Letter
and attachment dated 24 August
2004.
|
Date: 17 Sept 04 | REVIEWED BY: /s/ ACL |
for
C. DeMaris
|
|
Date: 23 September 04 | CONCURRENCE: /s/ A. Grumbles |
A
Grumbles
|
WA-1220-S-101-S | DATE : 17 September 2004 |
PAGE:
7
of 8
|
|
Cs-131
Brachytherapy Seed Model CS-1
|
|
IsoRay,
Richland, WA 99352 USA
|
|
Lot
Number:
|
|
Assay
Date:
|
|
Number
of Sources:
|
|
Total
Activity: mCi
|
|
NON-STERILE
|
|
Caution:
Cesium-131
Radioactive
Material
|
Cs-131
Brachytherapy Seed Model CS-1
|
||||
Manufactured
By:
IsoRay,
Inc.
350
Hills Street, Suite 106
Richland,
WA 99352 USA
Phone:
509-375-1202
|
Certificate
Number:
|
|||
Lot
Number:
|
||||
Number
of Seeds:
________________
|
Reference
Date:
______________
|
Implant
Date:
___________
|
||
Total
Apparent Activity (mCi):
|
||||
Total
Air Kerma
μ
Gy
m
2
h
-1
(U):
|
||||
Midpoint
Apparent Activity (mCi):
|
||||
Caution:
Federal law restricts this device to sale by or on the order of
a
physician.
|
Midpoint
Air Kerma
μ
Gy
m
2
h
-1
(U):
|
|||
Patient
Name or ID:
|
||||
Caution:
Radioactive Material Cesium -131
|
Physician
Name:
|
|||
SINGLE
USE ONLY
|
WARNING:
NON-STERILE
|
WA-1220-S-101-S | DATE : 17 September 2004 |
PAGE:
8
of 8
|
|
CAUTION:
RADIOACTIVE MATERIAL
|
CAUTION
Radioactive
Materials
|
READ
THE
WARNINGS
AND PRECAUTIONS
SECTION OF THE PACKAGE INSERT SHEET ENCLOSED WITH THIS PACKAGE
BEFORE
HANDLING THIS CONTAINER OR CONTENTS
|
A.
|
The
effective date of this CRADA shall be the latter date of (1) the
date on
which is signed by the last of the Parties hereto or (2) the date
on which
it is approved by DOE.
|
E.
|
Upon
execution of this Amendment 1 by Participant, Participant shall provide
Contractor with an initial payment of $26,766. On or before thirty
(30)
days from the date Participant executes this Amendment, Participant
shall
provide Contractor with a second payment of $26,766. On or before
sixty
(60) days from the date Participant executes this Amendment, Participant
shall provide Contractor with a final payment of $26,765. No work
will
begin before the receipt of the initial cash advance. Failure of
Participant to provide the necessary advance funding is cause for
termination of the CRADA
|
ACCEPTED
AND AGREED TO:
|
ACCEPTED
AND AGREED TO:
|
|
FOR
CONTRACTOR:
|
FOR
PARTICIPANT:
|
|
By
/s/
Rod K. Quinn
|
By
/s/
Donald R. Segna
|
|
NAME
Rod K. Quinn
|
NAME
Donald R. Segna
|
|
TITLE
Contracting Officer
|
TITLE
VP
Strategic Planning
|
|
DATE
1/18/05
|
DATE
1/14/05
|
·
|
Revise
the payment terms by requiring three equal payments over the next
three
months rather than one lump sum payment at the start of the CRADA
project;
and
|
·
|
Add
one month to the CRADA project term to accommodate the delay in the
start
of the project from the original CRADA effective date (December 22,
2004)
until now when the payment terms were
revised.
|
·
|
Prior
to the start of radioactive work, IsoRay may set up equipment at
their
laboratory in the APEL facility for cold (non-radioactive) demonstration
of developed method for and preparations of radioactive work. PNNL
staff
will become familiar with the separation operations and will simulate
steps to be used for the radioactive work.
|
·
|
PNNL
staff will set up equipment and materials for separation chemistry
with
radioactive material in the RPL to ensure safety, operability, and
ALARA.
Procedures will be approved for use in the RPL prior to
use.
|
·
|
Radiological
work permits (RWPs) will also need to be developed and approved for
conducting this work in the RPL.
|
·
|
The
mini hotcell in Room 23 of the RPL will be used for the initial separation
of yttrium-90 from strontium-90. Prior to use the cell will be cleaned
by
PNNL staff to remove waste materials and equipment as part of a legacy
waste project. The cell will be wiped down and smears taken to determine
whether unwanted radionuclides are present. The presence of Sr-Y-90
contamination is acceptable but gamma-emitting fission products are
not.
|
·
|
Sr/Y
separations will be conducted in the Room 23 mini cell by PNNL staff.
The
Sr-90 ampoule(s) will be combined and then split into two, equal,
~
3.5
Curie batches. Several separation runs will be conducted in order
to
produce
~
2
Ci of Y-90 per run for purity analysis and testing.
|
·
|
Following
separation from the Sr, the Y fraction will be removed from the hot
cell
by PNNL staff and transferred to the Y-90 glovebox in the same room
for
additional purification and processing.
|
·
|
The
purity and activity of the Y-90 product will be measured by PNNL
using ICP
metals analysis and beta/gamma
counting.
|
·
|
Data
compiled throughout the execution of this scope and data collected
from
previous testing will be analyzed to determine process efficiencies
jointly by IsoRay and PNNL. Deficiencies or process variability will
be
evaluated to determine root cause of the anomaly.
|
·
|
Process
steps identified as suspect will be technically critiqued and recommended
changes documented and approved by IsoRay staff. If appropriate,
additional testing will be conducted to confirm the cause and validate
the
process change.
|
·
|
IsoRay
may request PNNL to ship a small amount of the final product to an
investigator for purity and labeling of proteins for
research.
|
·
|
Complete
Project Readiness Activities
|
2
Weeks from Project Start Date
|
·
|
Complete
Isotope Separations
|
6
Weeks from Project Start Date
|
·
|
Complete
Analytical Measurements and Report
|
6
Weeks from Project Start Date
|
·
|
Ship
Final Product to Investigator
|
8
Weeks from Project Start Date
|
·
|
Complete
Final Summary Report
|
10
Weeks from Project Start Date
|
·
|
Labor
and overhead
|
$
|
2,500
|
||||
|
Total
in-kind contribution
|
$
|
2,500
|
§
|
Staff
hours for direct scientific
|
$
|
42,630
|
||||
§
|
Analytical
Cost Center
|
$
|
34,233
|
||||
§
|
Supplies
and Equipment
|
$
|
1,167
|
||||
§
|
Waste
Disposal
|
$
|
1,452
|
||||
§
|
Shipping
Costs
|
$
|
815
|
||||
|
Total
funds-in
|
$
|
80,297
|
·
|
Amend
the completion date from September 30, 2005 to December 31,
2006.
|
·
|
Amend
the total estimated cost from Eight Hundred Sixty-One Thousand
Two Hundred
Seventeen Dollars and No Cents ($861,217.00) to One Million Eight
Hundred
Forty-One Thousand Nine Hundred Eighty-Five Dollars and No Cents
($1,841,985.00).
|
·
|
Amend
the scope of the work in accordance with attached Statement of
Work dated
February 23, 2005.
|
ISORAY
MEDICAL, INC.
|
BATTELLE
MEMORIAL INSTITUTE
Pacific
Northwest Division
|
By
/s/ Donald R. Segna
|
By
/s/ Alta Jones
|
Name
Donald R. Segna
|
Name
Alta Jones
|
Title
VP Strategic Planning
|
Title
Contracting Officer
|
Date
2/22/05
|
Date
2-23-05
|
CUSTOMER
INFORMATION
|
IsoRay
Medical, Inc.
|
||||||||||||
LEGAL
NAME OF CUSTOMER
|
||||||||||||
350
Hills Street, Suite 106
|
|
Richland
|
WA
|
|
99354
|
|||||||
STREET
ADDRESS
|
CITY
|
STATE
|
ZIP
|
PHONE
|
||||||||
BILLING
NAME (IF DIFFERENT FROM ABOVE)
|
BILLING
STREET ADDRESS
|
|||||||||||
CITY
|
STATE
|
ZIP
|
PHONE
|
|||||||||
EQUIPMENT
LOCATION (IF DIFFERENT FROM ABOVE)
|
||||||||||||
SUPPLIER
INFORMATION See schedule
“
A
”
,
attached hereto and made a part of.
|
RENTAL
TERMS
|
RENTAL
PAYMENT AMOUNT
|
SECURITY
DEPOSIT
|
Term
in months
48
(MOS.)
Rent
Commencement Date:
|
48
Payment of
$1,331.71
(plus applicable taxes)
Rental
Payment Period is Unless
Otherwise
Indicated
|
$2,663.42
Received
|
THIS
IS A NONCANCELABLE/IRREVOCABLE LEASE, THIS LEASE CANNOT BE CANCELLED
OR
TERMINATED.
|
LESSOR
ACCEPTANCE
|
CUSTOMER
ACCEPTANCE
|
||||||
DATED:
April 14 2005
|
DATED:
April
3
|
2005
|
|||||
LESSOR:
Nationwide Funding, LLC
|
CUSTOMER:
IsoRay,
Medical, Inc.
|
||||||
SIGNATURE:
X
/S/
EVAN LANG
|
SIGNATURE:
X
/S/
MICHAEL DUNLOP
|
||||||
TITLE:
PRESIDENT
|
TITLE
CFO
|
||||||
ACCEPTANCE
OF DELIVERY
|
ACCEPTANCE
OF DELIVERY
|
GUARANTY
|
Nationwide
Funding, LLC
|
IsoRay
Medical, Inc.
|
|
Lessor
|
Lessee
|
|
/s/
Evan Lang
|
/s/
Michael Dunlop
|
|
Signature
|
Signature
|
|
|
||
Evan
Lang, President
|
Michael
Dunlop, CFO
|
|
Name
& Title
|
Name
& Title
|
|
04-14-05
|
4/12/05
|
|
Date
|
Date
|
Item
|
Quantity
|
Description
|
1
|
1
|
SP-012
Glovebox Large Shielding Window Option (3 each 16
”
x 24
”
)
|
/s/
Michael Dunlop
|
CFO
|
|
By:
Michael Dunlop
|
Title:
|
|
Date:
4/6/05
|
/s/
Evan Lang
|
President
|
|
By:
Evan Lang
|
Title:
|
|
By:
/s/
Michael Dunlop
|
Date:
4/6/05
|
|
Michael
Dunlop, CFO
|
Lessee
Name: Lessor Name:
|
||
IsoRay
Medical, Inc.
|
Nationwide
Funding, LLC
|
|
By:
/s/
Michael Dunlop
|
By:
/s/
Evan Lang
|
|
Title:
CFO
|
Title:
President
|
|
Date:
4/3/05
|
Date:
4/14/05
|
|
(a)
|
LESSEE
’
s
policy of liability insurance shall list LESSOR as additional insured
and
shall also contain an endorsement that although LESSOR is listed
as
additional insured, LESSOR shall not be entitled to recover under
the
policy for any loss or damage occasioned to it or its agents or
employees
except by reason of LESSEE
’
s
negligence. Any insurance policy LESSEE is required to procure
and
maintain under this Lease shall be issued by a responsible insurance
company or companies licensed to do business in the State of Washington.
Further, each such policy shall provide that it may not be canceled,
terminated, or changed except after ten (10) days prior written
notice to
LESSOR.
|
(b)
|
LESSOR
and LESSEE each waives any claim it might have against the other
for
personal injury or death or for damage to or theft, destruction,
loss, or
loss of use of any property, to the extent the same is insured
against
under any insurance policy that covers the Building, LESSOR
’
s
or LESSEE
’
s
fixtures, personal property, leasehold improvements, or business,
or is
required to be insured against under the terms hereof, and each
party
shall cause its insurance carrier to endorse all applicable policies
waiving the carrier
’
s
rights of recovery under subrogation or otherwise against the other
party.
|
§
|
hot
cells;
|
§
|
glove
boxes;
|
§
|
analytical
equipment;
|
§
|
radiation
monitoring equipment;
|
§
|
computers
and peripheral equipment; and,
|
§
|
ancillary
and support equipment related to the
above.
|
Novotec
USA
,
Inc.
|
IsoRay,
Inc.
|
|
723
The Parkway
|
350
Hills Street, Suite 106
|
|
Attn:
Sandra I. Muller
|
Attn:
Roger E. Girard
|
|
Phone:
509/943-5319
|
Phone:
509/375-1202
|
|
Fax:
509/943-5528
|
Fax:
509/375-3473
|
NUVOTEC,
USA
,
INC.
|
ISORAY,
INC.
|
By:
/s/
Robert L. Ferguson
|
By:
Roger E. Girard
|
Name:
Robert L. Ferguson
|
Name:
Roger E. Girard
|
Title:
Chairman & Chief Executive
|
Title:
Chief Executive Officer Officer
|
a.)
|
Lease
Lines.
LESSOR and LESSEE hereby agree that LESSOR will acquire and lease
to
LESSEE, EQUIPMENT with an aggregate value of up to the amount specified
under
“
Approved
Amount of Lease Line
”
on
the Lease Line Schedule attached as Exhibit A-1 to this Master
Lease
Agreement (such commitment is referred to as a
“
LEASE
LINE
”
).
From time to time, LESSOR and LESSEE may (but are under no obligation
to)
agree to establish one or more additional LEASE LINES pursuant
to which
LESSOR agrees to acquire and lease to LESSEE, EQUIPMENT with an
aggregate
value of up to the amount specified for each such LEASE LINE. For
each
LEASE LINE agreed by the parties, LESSOR and LESSEE will execute
an
additional Exhibit A to this Master Lease Agreement, and each such
Exhibit
A will be numbered sequentially (i.e., designated as Exhibit A-2,
Exhibit
A-3, etc.) and will incorporate the terms of this Master Lease
Agreement.
No LEASE LINE shall be established, and LESSOR shall have no liability
or
obligation under any LEASE LINE, unless and until the appropriate
Exhibit
A is executed by both LESSOR AND LESSEE.
|
b.)
|
Leases.
LESSOR and LESSEE agree that the terms of this Master Lease Agreement
shall apply to and be incorporated by reference in one or more
Lease
Schedules, each of which reference(s) the Master Lease Agreement
Number
indicated above. The word
“
LEASE
”
shall mean any one of the Individual Lease Schedules executed hereunder,
each of which shall incorporate the terms and conditions of this
Master
Lease Agreement (including the terms specified on the applicable
Exhibit A
hereto, as determined below) and shall be evidenced by the original
Lease
Schedule and an attached copy of this Master Lease Agreement. The
word
“
LEASES
”
shall mean all of the individual Lease Schedules executed under
and
incorporating the terms of this Master Lease Agreement collectively.
The
work
“
EQUIPMENT
”
shall mean (i) for purposes of each LEASE, the EQUIPMENT, which
is the
subject of such LEASE, as defined and described in the applicable
Lease
Schedule, and/or (ii) all of the EQUIPMENT subject to all of the
LEASES,
collectively, in each case as the context may require. Each Lease
Schedule
will include an EQUIPMENT description, the EQUIPMENT location,
the minimum
lease term and payment and security deposit information. Each LEASE
shall
be enforceable upon execution by LESSEE and subsequent counter-signature
by LESSOR indicating acceptance. By entering into each Lease Schedule,
LESSOR and LESSEE agree that (i) the transaction effected by the
Lease
Schedule constitutes a lease funding by LESSOR under the LEASE
LINE then
in effect, (ii) LESSOR
’
s
remaining funding obligations under the applicable LEASE LINE shall
be
reduced accordingly, and (iii) the initial lease period, the initial
rent
payment amount, the documentation fees, the security deposit payment
and
release requirements, the renewal rent payment amounts applicable
to the
LEASE shall be determined pursuant to the applicable LEASE LINE,
as
outlined on the Exhibit A to this Master Lease Agreement which
specifies a
“
Date
of Lease Line Approval
”
occurring on or before the date of the Lease Schedule and a
“
Funding
Expiration Date
”
occurring after the date of acceptance of the Lease Schedule by
LESSOR,
and shall be set forth with specificity on the applicable Lease
Schedule.
|
Prime
Lending Rate:
|
5.75%
(Effective March 31, 2005)
|
|
Initial
Lease Term:
|
36
Months
|
|
Advance
Payments:
|
Lessee
will pay Lessor the first payment at the time each individual
Lease
|
|
Schedule
is executed.
|
||
Documentation
Fees:
|
0.50%
of the total equipment invoice amount included on the individual
Lease
|
|
Schedule,
or $250.00, whichever is greater.
|
||
Security
Deposit Percentage:
|
15%
per each individual Lease Schedule, to be paid at the time each
individual
Lease Schedule is executed.
|
|
Security
Deposit Amount:
|
$64,500.00
(based on Approved Amount of Lease Line)
|
|
Security
Deposit Releases:
|
Before
releasing Security Deposits at Lease end the following three
conditions
|
|
must
exist: 1) Lessor must be in receipt of Lessee
’
s
financial statements (Income/Profit & Loss Statement, Balance
Sheet,
|
ISORAY
MEDICAL, INC., A DELAWARE CORPORATION
|
VENCORE
SOLUTIONS LLC
|
350
HILLS STREET
|
4500
SW KRUSE WAY
|
SUITE
106
|
SUITE
350
|
RICHLAND,
WA 99354
|
LAKE
OSWEGO, OR 97035
|
LESSEE: | LESSOR: |
ISORAY MEDICAL, INC., | VENCORE SOLUTIONS LLC |
A DELAWARE CORPORATION | |
By:
X
/s/ Roger Girard
|
By:
/s/ Chris Fenner
|
Roger
Girard
|
|
Title:
CEO
& CHAIRMAN
|
Title:
Managing Director
|
Date
x
5-7-05
|
Date:
______________
|
SECURED
PARTY:
DEBTOR
|
ISORAY MEDICAL, INC., | |
VENCORE SOLUTIONS LLC | A DELAWARE CORPORATION | |
By:
/s/ Chris Fenner
|
By:
X
/s/ Roger Girard
|
|
Roger
Girard
|
||
Title:
Managing Director
|
Title:
CEO & CHAIRMAN
|
|
Date:_____________________________
|
Date:
X
5-07-05
|
NAME
|
TITLE
OR POSITION
|
SIGNATURE
|
||
ROGER
GIRARD
|
CEO
& CHAIRMAN
|
X
/s/ Roger Girard
|
||
X
/s/ David J. Swanberg
|
|
Corporate
Secretary
|
|
David
J. Swanberg
|
LESSOR
|
LESSEE:
|
|
ISORAY
MEDICAL, INC.,
|
||
VENCORE
SOLUTIONS LLC
|
A
DELAWARE CORPORATION
|
|
By:______________________________________
|
By:
x
/s/
Roger Girard
|
|
Roger
Girard
|
||
Title:______________________________________
|
Title:
x
CEO & CHAIRMAN
|
|
Date:______________________________________
|
Date:
x
05-07-05
|
|
1.
|
Creditor
agrees to subordinate its interest in the Equipment to the interest
of
Lessor in the Equipment.
|
2.
|
Creditor
agrees that it shall take no actions against the Equipment and
shall not
assign or transfer its security interest in the Equipment of Lessee
to any
other party, until and unless all of the terms and conditions of
the
Lease(s), including but not limited to the payment of all lease
rental
payments, have been satisfied, without first obtaining the written
consent
of Lessor.
|
BENTON-FRANKLIN
ECONOMIC DEVELOPMENT
|
||
VENCORE
SOLUTIONS LLC
|
DISTRICT
|
|
By:_____________________________________
|
By:
X________________________________________
|
|
Title:
___________________________________
|
|
Title:
X________________________________________
|
Date:____________________________________
|
|
Date:
X________________________________________
|
LESSEE: | ||
ISORAY MEDICAL, INC., | ||
A DELAWARE CORPORATION | ||
By: X /s/ Roger Girard | ||
Roger Girard | ||
Title: CEO & CHAIRMAN | ||
Date:
X
05-07-05
|
3.
|
Creditor
agrees that it shall take no actions against the Equipment and
shall not
assign or transfer its security interest in the Equipment of Lessee
to any
other party, until and unless all of the terms and conditions of
the
Lease(s), including but not limited to the payment of all lease
rental
payments, have been satisfied, without first obtaining the written
consent
of Lessor.
|
LESSOR:
|
CREDITOR:
|
|
BENTON-FRANKLIN
ECONOMIC DEVELOPMENT
|
||
VENCORE
SOLUTIONS LLC
|
DISTRICT
|
|
By:_____________________________________
|
By:
X
/s/
Gwen Luper
|
|
Title:
___________________________________
|
Title:
X
EXECUTIVE
DIRECTOR
|
|
Date:____________________________________
|
Date:
X
5-9-05
|
|
LESSEE:
|
||
ISORAY
MEDICAL, INC.,
|
||
A
DELAWARE CORPORATION
|
||
By:
X _________________
|
||
Roger
Girard
|
||
Title:
CEO
& CHAIRMAN
|
||
Date:
X
________________
|
1.
|
Creditor
agrees to subordinate its interest in the Equipment to the interest
of
Lessor in the Equipment
with
the exception of two Unitech Myachi L W5A-JE laser welders, model
numbers
8-800-01-01 and 8-802-01-01 with serial numbers of 04110099 and
04040181.
|
2.
|
Creditor
agrees that it shall take no actions against the Equipment and
shall not
assign or transfer its security interest in the Equipment of Lessee
to any
other party, until and unless all of the terms and conditions of
the
Lease(s), including but not limited to the payment of all lease
rental
payments, have been satisfied, without first obtaining the written
consent
of Lessor.
|
LESSOR: | CREDITOR: |
VENCORE SOLUTIONS LLC | COLUMBIA RIVER BANK |
By:_____________________________________ | By: X /s/ |
Title: ___________________________________ |
Title:
X
SUP
+ REGION MANAGER
|
Date:____________________________________ |
Date:
X
May 6, 2005
|
LESSEE:
|
|
ISORAY
MEDICAL,
INC.,
|
|
A DELAWARE CORPORATION | |
By: X /s/ Roger Girard | |
Roger Girard | |
Title: CEO & CHAIRMAN | |
Date: X 05-07-05 |
1.
|
DEFINITIONS:
|
2.
|
SERVICES
|
3.
|
SUPPLY
|
Customer
|
University
Irradiation
|
|
Purchase
Commitment:
|
Services
Commitment:
|
|
o
|
[**]
|
[**]
|
4.
|
TERM
|
5.
|
REPRESENTATIONS
AND WARRANTIES
|
6.
|
RISK
OF LOSS
|
7.
|
COMPENSATION
|
1. |
Terms
and Conditions of the Sale
|
1.1 |
On
the terms and subject to the conditions set forth in this Agreement,
ACM
shall provide to Manufacturer (as it shall relate to
Manufacturer
’
s
Product list), when and as requested by the Manufacturer, the Services
set
forth in Exhibit A hereto and made a part hereof, including the relevant
ACM Products. The term of this Agreement shall commence on March
1, 2006
(the
“
Commencement
Date
”
),
and shall continue thereafter for a period of one year (the
“
Initial
Term
”
).
At the end of the Initial Term, this Agreement will automatically
extend
for additional (1) year unless otherwise terminated by written notice
from
one party no less than 60 days prior to the expiration of the Initial
Term. For purposes of this Agreement, the Initial Term, and any extension
thereof, shall be referred to as the
“
Term
”
.
|
1.2 |
The
purchase prices to be paid for the Services provided by ACM and accepted
by Manufacturer, in accordance with the provisions of this Agreement,
are
set forth in Exhibit B attached hereto.
|
2. |
Compliance
with all Applicable Laws
|
2.1 |
During
the Term, ACM shall comply, in all material respects, with all applicable
laws, ordinances, rules, regulations, orders, licenses, permits and
other
requirements, now or hereafter in effect, of any applicable governmental
authority with respect to the delivery of the Services, including
without
limitation all requirements regarding labeling and traceability of
the
Products as processed by ACM, as such requirements arise out of or
in
connection with the performance of the Services. ACM shall provide
all
reasonable cooperation to Manufacturer in connection with
Manufacturer
’
s
compliance with any law, ordinance, rule, regulation, order, license,
permit or other requirement regarding the provision of the Services
and
the Products.
|
2.2 |
During
the Term, Manufacturer shall comply, in all material respects, with
all
applicable laws, ordinances, rules, regulations, orders, licenses,
permits
and other requirements, now or hereafter in effect, of any applicable
governmental authority with respect to the delivery of the Products
as
manufactured by the Manufacturer. Manufacturer shall provide all
reasonable cooperation to ACM in connection with ACM
’
s
compliance with any law, ordinance, rule, regulation, order, license,
permit or other requirement regarding the provision of the Services
and
the Products.
|
3. |
Representations
and Warranties
|
3.1 |
ACM
Representations, Warranties and
Covenants.
|
a. |
It
is a corporation duly organized and validly existing under the laws
of the
state of Connecticut. ACM has full corporate power to conduct its
affairs
as currently conducted and contemplated hereunder. All necessary
corporate
action has been taken to enable it to execute and deliver this Agreement
and perform its obligations hereunder.
|
b. |
That
the services provided will be of a professional quality, conforming,
in
all material respects, to generally accepted industry standards and
practices for similar services, and, in the case of the ACM Products,
to
ACM
’
s
specifications thereof and to any applicable regulatory requirements
(e.g.
compliance with 510(k) requirements). ACM, without any expense to
Manufacturer, shall obtain all required licenses and permits, and
shall
obey and abide by all known laws, regulations, ordinances and other
rules
of the United States or the state in which the Products are being
provided, or any other duly constituted public authority as applicable
to
this Agreement, applicable to the performance of the Services or
to the
use or sale of the ACM Products. If ACM fails to perform such Services
as
warranted hereunder and ACM receives written notice specifying in
detail
the nature of the default during the thirty (30) day period after
the
completion of such Services, ACM will, at Manufacturer
’
s
option, either re-perform the Services at ACM
’
s
expense or credit the price of the affected Services. Except for
ACM
’
s
indemnity obligations hereinafter set forth, and Manufacturer
’
s
termination rights, the foregoing are Manufacturer
’
s
sole and exclusive remedies for breach of this warranty by
ACM.
|
3.2 |
Manufacturer
Representations, Warranties and
Covenants.
|
a. |
It
is a corporation duly organized and validly existing under the laws
of the
State of its incorporation, will full power to conduct its affairs
as
currently conducted and contemplated hereunder. All necessary corporate
action has been taken to enable it to execute and deliver this Agreement
and perform its obligations hereunder.
|
b. |
That
the Products provided will be of a professional quality, conforming,
in
all material respects, to generally accepted industry standards and
practices for similar products, and shall comply with
Manufacturer
’
s
published specifications and ISO 2919-199E, Classification C53X42.
The
Manufacturer, without any expense to ACM, shall obtain all required
licenses and permits, and shall obey and abide by all applicable
laws,
regulations (e.g. compliance with 510(k) requirements), ordinances
and
other rules of the United States or the state in which the Products
are
being provided, or any other duly constituted public authority as
applicable to this Agreement, other than laws, regulations, etc.
which are
applicable by reason of ACM
’
s
performance of the Services.
|
4. |
Indemnification
|
4.1 |
By
Manufacturer: Manufacturer shall indemnify, defend and hold harmless
ACM,
and its affiliates, parent, subsidiaries, officers, directors,
shareholders, employees and agents, from and against any and all
claims,
actions, or demands (including without limitation reasonable fees
and
expenses of legal counsel incurred in settling or defending any such
claim, action or demand) arising out of or resulting, in whole or
in part
from Manufacturer
’
s
(i) breach of any representation, warranty, obligation or covenant
of
Manufacturer set forth in this Agreement, or (ii) gross negligence
with
respect to its provision of the Products or willful misconduct of
Manufacturer or Manufacturer
’
s
employees, agents and contractors, or (iii) any product liability
claims
(whether sounding negligence, strict liability or otherwise) relating
to
personal injury or death allegedly arising out of the use of the
Products,
except product liability claims arising out of or based on the Services
or
the ACM Products provided in connection therewith.
|
4.2 |
By
ACM: ACM shall indemnify, defend and hold harmless Manufacturer,
and its
officers, directors, shareholders, employees and agents from and
against
any and all claims, actions, or demands (including without limitation
reasonable fees and expenses of legal counsel incurred in settling
or
defending any such claim, action or demand) arising out of or resulting
from ACM
’
s
(i) breach of any representation, warranty, obligation or covenant
of ACM
set forth in this Agreement, or (ii) willful misconduct or gross
negligence with respect to the Services; or (iii) any product liability
claims (whether sounding in negligence, strict liability or otherwise)
relating to personal injury or death allegedly arising out of the
use of
the Products, to the extent such liability claims arise out of or
are
based on the Services or the ACM Products provided in connection
therewith.
|
4.3 |
The
foregoing indemnities are conditioned on prompt written notice of
any
claim, action, or demand for which indemnity is claimed; complete
control
of the defense (and, if applicable, settlement) thereof by the
indemnifying party (provided, that any such settlement shall leave
the
indemnified party with no liability whatsoever and shall not admit
to any
wrongdoing on the part of the indemnified party); and cooperation
of the
other party in such defense.
|
4.4 |
All
indemnity obligations under this Agreement (i) shall apply to claims
arising as a result of this agreement, whether such claims arise
before or
after the termination of this Agreement, and (ii) shall survive the
termination or expiration of this
Agreement.
|
4.5 |
During
the term of this Agreement, Manufacturer shall carry and maintain
in full
force and effect, at Manufacturer
’
s
own expense, appropriate comprehensive general and product liability
insurance coverage, in the amount of $1 million per occurrence, $2
million
aggregate, and shall take all necessary action to name ACM as an
additional insured with respect to such policies. Manufacturer agrees,
to
deliver certificates of such insurance to ACM, at ACM
’
s
written request and, in any event, not less than ten (10) days prior
to
the expiration of any such policy. Such insurance shall not be cancelable
except upon ten (10) days written notice to
ACM.
|
4.6 |
During
the term of this Agreement, ACM shall carry and maintain in full
force and
effect, at ACM
’
s
own expense, appropriate comprehensive general and product liability
insurance coverage, in the amount of $1 million per occurrence, $2
million
aggregate, and shall take all necessary action to name Manufacturer
as an
additional insured with respect to such policies. ACM agrees, to
deliver
certificates of such insurance to ACM at Manufacturer
’
s
written request, and in any event not less than ten (10) days prior
to the
expiration of any such policy. Such insurance shall not be cancelable
except upon ten (10) days written notice to Manufacturer. Such coverage
shall cover all claims arising out of Services or ACM Products provided
under this Agreement, whether such claims arise during or after the
Term
hereof.
|
5. |
Limitation
of Liability
|
6. |
Confidential
Information
|
6.1 |
Each
of the parties hereto acknowledges that, from time to time during
the
Term, the parties hereto may come into the possession of confidential
information of the other party relating to such party
’
s,
operations, activities, intellectual property (including, without
limitation, trade secrets and know-how), products and/or services,
(collectively, the
“
Confidential
Information
”
),
and that such information is property valuable to the party that
has
developed it, and that the party that has developed it desires to
retain
it in confidence and withhold it from publication to others, and
that such
party has a legitimate business interest in such intent. Accordingly,
each
party hereby agrees that during the Term and thereafter, (a) it will
not
copy, communicate or disclose, in any manner, any of the Confidential
Information of the other party, except internally or as otherwise
provided
herein, (b) it will use Confidential Information belonging to the
other
solely for the purpose(s) for which it was disclosed hereunder or
otherwise as contemplated hereby, and (c) it will not disclose
Confidential Information (including without limitation the terms
and
conditions of the Agreement) belonging to the other party, other
than to
its employees, consultants and/or other third parties reasonably
requiring
such Confidential Information who are bound by written obligations
of
nondisclosure and non-use; provided that the foregoing shall not
restrict
any disclosure by either party required by applicable law provided
that
the other party is given prompt written notice thereof and a reasonable
opportunity to review such disclosure and, if applicable, seek a
protective order or other method of limiting the scope of such disclosure.
This provision will survive for a period of five (5) years after
the date
this Agreement is terminated, provided that the recipient
’
s
obligations with respect to any particular Confidential Information
will
terminate at such earlier time as any of the exceptions set forth
below in
this Section 6.1 first apply. The term
“
Confidential
Information
”
shall also include all information of each party
’
s
affiliates, parents and subsidiaries which would qualify as Confidential
Information if it belonged to such party.
|
Notwithstanding the foregoing, Confidential Information shall not include any information disclosed hereunder that, at the relevant time: (a) is or becomes available to the public without breach of this Agreement; (b) was previously known by the recipient without obligation of confidentiality; (c) is received from a third party without breach of any obligation of confidentiality; (d) is independently developed by recipient without reliance on information disclosed hereunder; (e) is approved for release by written authorization of the disclosing party (but only to the extent of such authorization); (f) can be readily determined by an examination of publicly-available products. Further, information relating to “ Customers ” of Brachytherapy Services is well known in the industry and does not constitute Confidential Information. ACM acknowledges that Manufacturer does not wish to be exposed to any Confidential Information relating to the design or manufacture of the ACM Products or to any confidential methods of providing the Services, unless absolutely necessary. Likewise, Manufacturer acknowledges that ACM does not wish to be exposed to any Confidential Information relating to the design or manufacture of Manufacturer ’ s products unless absolutely necessary. Accordingly, each party agrees not to disclose any such information to the other without the prior written consent of the recipient, after the recipient has received a written summary of the nature of the information which the other party proposes to disclose and of the reason disclosure is considered necessary. |
6.2 |
Each
party hereto acknowledges that its unlawful disclosure of any Confidential
Information of the other may give rise to irreparable injury to the
other,
or the owner of such information, inadequately compensable to damages.
Accordingly, each party may seek and obtain injunctive relief against
the
breach or threatened breach of the foregoing undertakings, in addition
to
any other legal remedies which may be available without requirement
of
posting bond or other security.
|
6.3 |
In
no event shall a party be entitled to use any of the other
’
s
Confidential Information, or any derivatives thereof, in connection
with
the sale or production of any products or services that are competitive
with (direct or indirect) or similar to those products and services
sold,
produced, manufactured, offered for sale, designed or developed by
the
disclosing party or any of its affiliates or parent. Each party agrees
to
refrain from knowingly infringing, in any manner, directly or indirectly,
on any Confidential Information of the other party (or any of its
affiliates or parent), regardless of whether such Confidential Information
has been registered, filed or recorded with the United States Patent
and
Trademark Office, or any similar federal, state or international
agency or
regulatory body. Each party further agrees that it shall comply with
all
obligations imposed on it by the United States Patent and Trademark
Office
or any similar federal, state or international agency or regulatory
body
with respect to the other party
’
s
intellectual property rights. The obligations of this provision shall
survive the termination of this Agreement (a) for the life of the
relevant
intellectual property rights, in the case of patents and trademarks,
and
(b) for the applicable period described in Section 6.1, in the case
of
Confidential Information. The foregoing restrictions shall not apply
to
the provision by Manufacturer of any of the Services pursuant to
a
subsequent agreement with ACM that permits Manufacturer to perform
them.
|
6.4 |
The
obligations of each party set forth in this Section 6 shall be applicable
to all of such party
’
s
affiliates, subsidiaries, parent(s) and related entities, such that
those
parties shall be bound by the terms and conditions of this Section
6 as if
each was an original signatory to this Agreement.
|
6.5 |
Protected
Health Information. ACM acknowledges that individually-identifiable
information concerning the patients scheduled to receive implants
of the
Products is
“
Protected
Health Information
”
under 42 U.S.C. § 1320d, enacted by the Health Insurance Portability and
Accountability Act of 1996 (
“
HIPAA
”
),
and regulations promulgated thereunder, which Manufacturer and ACM
are
obligated to treat as confidential under such law and regulations,
and
which may also be covered by other confidentiality laws, rule, and
regulations. ACM agrees as follows: (a) to maintain the confidentiality
of
all such patient information in compliance with HIPAA and applicable
regulations thereunder, as the forgoing may now exist or hereafter
be
amended, and other applicable confidentiality laws, rules and regulations,
for so long as such obligations apply; (b) comply with such reasonable
or
customary obligations with respect to such patient information, as
may now
or hereafter be imposed on Manufacturer by contract with its customers
pursuant to HIPAA (e.g. under so-called Business Associate Agreements),
provided that Manufacturer shall disclose to ACM in writing the nature
of
the obligations under each such agreement; and (c) require any of
its
agents or subcontractors who may become privy to such patient information
hereunder to comply with the foregoing to the same extent ACM is
obligated
to do so, and include in its contracts with any such parties a clause
comparable to this clause.
|
6.6 |
Manufacturer
acknowledges that an affiliate of ACM is currently engaged in the
business
of selling a product similar in nature, form and substance to the
Product
(
“
BrachySciences
Business
”
).
Manufacturer agrees that performance of the BrachySciences Business
as it
is conducted on the Commencement Date, and as may hereinafter be
conducted, subject to this provision, shall not be limited or restricted
by any of the provisions of this Agreement, however, notwithstanding
the
previous clause, ACM acknowledges and agrees that it is responsible
for
ensuring that all Confidential Information of Manufacturer is safeguarded
in accordance with this Section 6, and that neither ACM nor any of
its
affiliates, including but not limited to the affiliate engaged in
the
BrachySciences Business, may use any Confidential Information of
Manufacturer for any use whatsoever other than as required or expressly
authorized by this Agreement.
|
7. |
Termination
|
7.1 |
Unless
extended pursuant to Section 1.1 above, this Agreement shall terminate
at
the expiration of the Initial Term, subject to the provisions of
Section
7.4 below.
|
7.2 |
Should
either party commit a material breach of its obligations hereunder
(except
with respect to the failure of a party to promptly pay amounts due
the
other hereunder, in which instance, the party entitled to payment
shall be
entitled to terminate this Agreement upon 10 business days written
notice
to the other party unless the payment is made within that time),
or should
any of the representations or warranties of either party in this
Agreement
prove to be untrue in any material respect, the other party may,
at its
option, terminate this Agreement by providing thirty (30) days
’
prior written notice of termination, which notice shall identify
and
describe, in detail, the basis for such termination, which notice
shall
identify and describe, in detail, the basis for such termination.
If,
prior to expiration of such notice period the defaulting party cures
such
default, termination shall not take place. Notwithstanding, the foregoing,
Manufacturer may terminate this Agreement on thirty days
’
notice if, at any time, ACM has availed itself of the right to cure
breaches of this Agreement three or more times in any three-month
period.
|
7.3 |
Should
either party admit in writing its inability to pay its debts generally
as
they become due, or make a general assignment for the benefit of
creditors, or institute proceedings to be adjudicated a voluntary
bankrupt, or consent to the filing of a petition of bankruptcy against
it,
or be adjudicated by a court of competent jurisdiction as bankrupt;
or
should either party seek reorganization under any bankruptcy act,
or
consent to the filing of a petition seeking such reorganization,
or should
either party have a decree entered against it by a court of competent
jurisdiction appointing a receiver, liquidator, trustee, or assignee
in a
bankruptcy or insolvency covering all or substantially all of such
party
’
s
property or providing for the liquidation of such party
’
s
property or business affairs; then the other party may, as its option
and
without notice, terminate this Agreement, effective
immediately.
|
7.4 |
Termination
of this Agreement shall not relieve either party of their obligations
(i)
with respect to those provisions of this Agreement which by their
express
terms survive termination of this Agreement, or (ii) arising prior
to the
termination or expiration of this agreement, including, without
limitation, the obligation of either party to satisfy any outstanding
payment obligations due and payable to the
other.
|
7.5 |
Upon
the termination of this Agreement, for any reason whatsoever, or
as
otherwise requested by either party, (i) ACM shall, within thirty
(30)
days thereof, return to Manufacturer all of Manufacturer
’
s
written materials, specifications and the like relating to the Product,
regardless of whether such material contains any Confidential Information,
and (ii) Manufacturer shall, within thirty (30) days thereof, return
to
ACM all of ACM
’
s
written materials, specifications and the like (including, without
limitation, all extracts, notes, synopses, and copies thereof) in
Manufacturer
’
s
control, custody or possession regardless of whether such material
contains any Confidential Information, except, in each case, one
(1)
archival copy which, if retained, shall be maintained in secure storage
and shall be used solely for purposes of evidencing what materials
of each
party the other party possessed, and for prosecuting or defending
actions
related to this Agreement. Upon the request of the disclosing party,
the
receiving party shall provide written certification, executed by
an
authorized officer of such party, that all documents and materials
relating the disclosing party
’
s
Confidential Information in such party
’
s
control or possession have either been returned to the disclosing
party,
or have been destroyed, except as provided above, and the receiving
party
is not in possession or control of any copies or other materials
relating
to the disclosing party
’
s
Confidential Information except as provided
above.
|
8. |
Independent
Contractor Status
|
8.1 |
Nothing
herein shall be construed to create a partnership, joint venture,
or
agency relationship between the parties hereto. Neither party shall
have
the authority to bind the other party by any act, omission,
representation, agreement or otherwise. Any employees, servants,
agents,
representatives or contractors of the parties shall be under the
exclusive
direction and control of each respective
party.
|
9. |
Governing
Law
|
9.1 |
This
Agreement shall be governed by, and construed and enforced in accordance
with the laws of the State of
Connecticut.
|
10. |
Dispute
Resolution
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10.1 | The parties shall follow these dispute resolution processes in connection with all disputes, controversies or claims, whether based on contract, tort, statute, fraud, misrepresentation or any other legal theory (hereinafter collectively “ Disputes ” ), except as otherwise noted, arising out of or relating to this Agreement or the breach or alleged breach hereof. The parties will attempt to settle all Disputes through good faith negotiations. If those attempts fail to resolve the Dispute within forty-five (45) days of the date of initial demand for negotiation, the Dispute shall be settled by binding arbitration conducted in Connecticut in accordance with the then current Commercial Arbitration Rules of the American Arbitration Association ( “ AAA ” ). Selection of one neutral arbitrator by the parties shall be from the AAA Panel list in accordance with the appointment Rules of the AAA. Each party shall bear its own expenses, and the parties shall equally share the filing and other administrative fees of the AAA and the expenses of the arbitrator. Any award of the arbitrator shall be in writing, shall state the reasons for the award (including any findings of fact and conclusions of law) and shall explain the breakout of any damages awarded. Judgment upon an award may be entered in any Court having competent jurisdiction. The arbitrator shall not have the power to award damages in excess of actual damages, such as punitive damages and damages excluded under the LIMITATION OF LIABILITY Section of this Agreement. The Federal Arbitration Act, 9 U.S.C. Section 1 to 14, shall govern the interpretation and enforcement of this Section governing dispute resolution. The provisions of this Section 10 shall survive any termination of this Agreement. |
10.2 | Notwithstanding the provisions of Section 10.1, neither a request or demand for arbitration, nor pendency of any such proceedings, shall forestall any pending notice of termination or toll any period for cure of a breach, nor shall the same preclude a party from terminating this contract pursuant to its terms. Arbitration may not be invoked, and no arbitrator may consider, any dispute as to terms of any extension, renewal or replacement of this Agreement or any decision by a party to withhold its consent or approval as to any matters as to which a specific provision of this Agreement requires such consent or approval, except as to matters where by the express terms hereof consent may not be unreasonably withheld. Nor must a party pursue arbitration in the event of a breach of its proprietary or intellectual property rights under law; in such case the aggrieved party may seek injunctive or other relief in any court of competent jurisdiction without recourse to the above procedure. In connection with a third-party claim, it may be that indemnification or other recourse can be claimed under this Agreement, or that the other party to this Agreement must or may be made a party to the third-party claim, or that other similar action is procedurally necessary or appropriate. In such case the indemnification, other recourse, or other action may be pursued in connection with the proceeding in which the third-party claim is pending without need for nay of the procedures contemplated by this Section 10. |
11.1 | All notices and other communications required or permitted to be given under this Agreement shall be in writing and shall be considered effective when deposited in the U.S. mail as registered mail, return receipt requested, postage prepaid, and addressed to the party at the address noted above, unless by such notice a different address shall have been designated in writing. Notice should be sent to the intended recipient as follows: |
12. |
Force
Majeure
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12.1 | Neither party shall be in default if failure to perform any obligation hereunder is caused solely by supervening conditions beyond the party ’ s control, including acts of God, civil commotion, strikes, labor disputes, and governmental demands or requirements, provided, however, any delay in performance exceeding 120 days shall be grounds for terminating this Agreement by the non-defaulting party. |
13. |
Severability
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13.1 | If any provision of this Agreement shall be held illegal, unenforceable, or in conflict with any law of a federal, state, or local government having jurisdiction over this Agreement, the validity of the remaining portions or provisions hereof shall not be affected thereby. |
14. |
Headings
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14.1 | The headings of the sections of this Agreement have been inserted for convenience of references only. |
15. |
Entire
Agreement; Construction
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15.1 | This Agreement supersedes all prior Service Agreement(s) between the parties (and their affiliates) only to the extent specifically expressed in this document. Unless otherwise specifically stated herein, the terms, conditions, obligations and rights set forth in the prior Service Agreement(s) between the parties (and their affiliates) shall survive in full force and effect. Except as expressly provided herein, this Agreement shall not be amended except by written agreement signed by both parties. |
15.2 | The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any party. |
16. |
Miscellaneous
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16.1 | This Agreement shall be binding upon and inure to the benefit of the respective parties hereto and their successors and permitted assigns. |
16.2 | The failure of either party to insist upon strict adherence to any term of this Agreement on any occasion shall not be construed as a waiver of or deprive either party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. Any waiver signed by either party must be in writing and signed by a duly authorized representative of such party. |
16.3 | The rights of the parties under and pursuant to this Agreement are personal to them, and the parties shall not assign or transfer this Agreement nor subcontract any portion of the services to be performed by them to any other person, firm, or corporation without the prior express written consent of the other party. Such consent shall be at the sole discretion of the other party and may be withheld for any reason. Any assignment of this Agreement without the other party ’ s prior written consent shall be void and of no effect |
Advanced Care Medical, Inc.
By: /s/ Gary Lamoureux
Name: Gary Lamoureux
Title: President/CEO
Date: 2/14/06
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IsoRay, Inc.
By: /s/ Roger E. Girard
Name: Roger E. Girard
Title: CEO/Chairman
Date:
2/28/06
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